Marriage is an exciting and busy time. You’re certainly busy budgeting the wedding, but don’t forget about discussing the future money matters too. People often overlook the fact that money issues/problems are the root cause of many unhappy and failing marriages. This isn’t an effort to be pessimistic or rain on the wedding parade, but rather an effort to start you off right by building a solid foundation that marriage and financial partnership can thrive upon. Start by considering the items in this simple ten point checklist.
- Making A Financial Plan
Establish combined financial goals by totaling what each owns and owes and earns and spends monthly. By knowing today’s monetary standing, you can better discuss future mortgage, children, and retirement goals. It’s important that the financial plan is appeasing to both parties.
- Paying Off Debts
When either spouse has premarital personal debt, such as credit cars or student loans, there must be a meeting of minds at the very beginning on how to pay it off. Do remember to consult with one another prior to assuming new debt.
- Spending Habits
Sometimes one spouse may be a bigger spender or saver than the other spouse. Tension develops if a fair budget isn’t immediately comprised. And, don’t neglect retirement saving, such as a qualified employer plan or IRA, even if saving for a home or car.
- Mingling Assets
The concept should be “ours,” not “mine” and “yours.” There are circumstances, such as one spouse having a significantly incongruous net worth from the other, where a prenuptial agreement could be a better option.
- Changing Your Name
If you do take on a spouses name, you should always notify the SSA, insurance providers, employer(s), and creditors.
- Review Benefit Coverage
In many cases, it’s a waste to pay separate individual health benefits. Coordinate health benefits to avoid duplicating coverage. Most of the time, new spouses can be added to existing coverage. Minimal life insurance is most likely suitable for comparable spousal salaries. This can be readdressed when planning for children.
- Marriage Tax Penalty
It doesn’t matter if you get married in April or December, as far an income taxes are concerned, you’ve been married the entire year. Most of the time filing as “married filing jointly” makes the most sense. Occasionally, “married filing separately” would be more beneficial. A tax professional can usually determine what filing status makes the best sense for your income, deductibles, and so forth.
- Planning For Retirement
It’s always prudent to think ahead to the “golden years” of life. After all, they don’t get golden on their own. The life expectancy of the spouse likely to survive the longest should be considered when figuring out when to start receiving Social Security payments and payouts from annuity or pensions; if you need help, you can contact a financial planner.
- Beneficiary Updates
Remember to update the beneficiaries on retirement plans and insurance. The law actually requires spousal written acknowledgment if they aren’t the beneficiary on some retirement plans. Community-property law varies by state. Again, a financial advisor can help you determine how bank accounts, personal property and such is passed on to your spouse.
- Creating And Updating Estate Plans
Your accountant or attorney can best advise you on how to create or update your will, trust, and other estate plan features. Accounts and property can be titled several different ways, based on your specific goals and needs. You might also consider certain legal documents, such as a durable power of attorney, to make necessary medical and financial decisions during illness/injury.
These points on budgeting, debt, taxes, insurance, estate planning, and retirement are important elements of getting a marriage off to a successful start. Couples should ideally view and address their finances as a single mind, versus two individuals on different paths.