Marriage and Money - Planning Your New Financial Life Together

Marriage introduces changes in a new couple’s financial situation that will affect all aspects of their life together. Everything from personal financial goals to credit card debt will bring new challenges to the relationship. Understanding how to navigate through these changes can be challenging, but planning ahead can allow you to build a strong financial foundation for your relationship.

Bank Accounts

One of the first obstacles to overcome is dealing with bank accounts.

Should you keep separate accounts, or put everything into a joint account? Or, should you have a combination of joint and separate accounts? Whatever you decide, this is an important first step to talk about when getting married.

It is generally a good idea to consider a combination of both joint and individual accounts. A joint account should be used for family expenses: the mortgage or rent, utilities, bills, groceries, and so on. In addition, each person should have an individual discretionary account for personal spending, or fun money. This can help simplify things when it comes to bills, yet also helps keep personal spending in-check.

Creating a Budget

Not only is it important to decide how to allocate your money at the bank, but this is the time to get serious about creating a family budget. Your new spouse will contribute new financial issues such as debt, assets, bills, and even savings to your household.

Even if you had created a budget for yourself in the past, these new pieces of the financial puzzle will undoubtedly change the new budget.

Take some time to sit down with your spouse and look at your combined cash flow. What debt payments will you both have? How much can you save? Can you find ways to combine expenses, such as switching to the same wireless phone plan?

Answering these questions together will help you develop the most realistic budget for your married life.

Planning for the Unexpected

Now that you’re married, you will also need to make important decisions about insurance and estate planning. If both of you work and are covered by a health plan through an employer, it is important to take a look at which plan will be the most beneficial. Getting married is one of the life events that allow you to change your health insurance election without waiting for the open enrollment period, so use this time wisely.

In addition to health insurance, this is a good time to discuss life insurance. When you’re single and without children, there is little need for life insurance since nobody is depending on your income but you. When you get married, you should discuss what would happen if your spouse was left to support your household alone, and consider whether or not life insurance would be appropriate. A sudden loss of income can be devastating to a family.

Retirement Planning

Once you have your benefits squared away, you’ll also want to take a look at your beneficiaries on existing retirement plans, pensions, IRAs and any other assets you may have.

When you establish beneficiaries on these accounts, you can ensure that your assets are disbursed properly when you die.

Don’t forget to take advantage of the many different retirement accounts that are available to help your tax situation. With two incomes, it can be a great time to begin saving for retirement and save money on taxes at the same time.

Talk About It

Finally, it all comes down to communication. Many couples find it hard to talk about money, and this can lead to problems down the road. You may recall the stress that money can cause when you’re single, so imagine how stressful it can be when you’re married.

Don’t let small problems or assumptions grow into large problems. From the onset, be open with each other and talk about your money concerns. If one of you is bringing substantial debt into the marriage, don’t hide it.

Be honest and come up with a plan for paying it off. No two people have identical values when it comes to money, so open communication will help identify what is important to each of you. Then you can make the best decisions about your money as a couple.