Getting married is a huge and exciting milestone! Many details are involved in the planning phase, but working together on a shared financial vision and keeping open communication will go a long way toward avoiding unnecessary stress in your relationship.
The following are a few financial points engaged couples and newlyweds should review.
Financial Goals and Budget
Start smart and converse about what you both hope to accomplish financially. This will help you structure your spending and savings habits. Keep it simple and set a monthly spending cap somewhere below your monthly income and apply the extra cash toward your financial goals.
Assets and Liabilities
List out the financial assets and liabilities you each bring into the marriage. Be honest with each other about your existing financial situation, especially relating to any debt that needs to be paid off.
Share Account Information
How you divvy up financial responsibilities is your choice, but if one spouse takes the lead then ensure the other spouse knows what accounts you have and how to access them if needed.
Once you know where you stand with assets and liabilities, it is important to get your basic estate planning documents in place. These include:
2. Durable power of attorney (all powers of attorney expire upon death of principal)
3. Advance medical directives (e.g., durable health care power of attorney, living will, etc.)
4. Living trust (not always necessary—it depends on your situation)
Life Insurance Coverage
Review your current life insurance policies to ensure that you have enough insurance on each spouse and the right type of insurance for your needs and goals. Update the beneficiary on any existing policies (if necessary).
Health and Other Insurance
Look at whose employer offers the best health care plan. Consider coverage as well as cost. For other insurance, check on possible discounts for married couples.
Account Titling and Beneficiaries
When you get married, review all financial accounts for proper account titling and beneficiaries. Depending on how you plan to manage household finances, you may want to change accounts to a joint registration, and depending on the intent of the accounts, you may also want to make sure your spouse is listed as the primary beneficiary. Remember to notify your employer of any beneficiary changes for your workplace retirement plan based on your new marital status.
Review tax withholdings from your paychecks. Whether you decide to have a little extra withheld or not, be mindful of your options and agree on your tax withholding approach.
Your spouse’s income and whether they are covered by an employer retirement plan could impact contributions to certain types of retirement plans, so it is important to understand the tax rules and ensure you get a successful start to your joint retirement savings.
When couples work together to put their household finances in order, it can relieve a major source of marital stress. Following the guidelines listed here can help eliminate future financial troubles in your marriage.
(Info from: UPCI Family Ministries – firstname.lastname@example.org)