6 Important Financial Tips for Newlyweds
Getting married is one of the most life-changing decisions one can make, and it’s not just because you’re finding someone to spend the rest of your life with. The financial implications can be huge. When you get married, you face many different financial decisions, from combining bank accounts to deciding when and where to buy a house.
Here are some of the most important financial tips to consider after you get married or to consider before you walk down the aisle.
- Talk About Financial Goals
To get on the same page financially, it’s essential that you talk through what you each want in life. Both of you probably have financial goals and likely have specific motivations that are tied to money. Unfortunately, money is one of the most common reasons people end their marriages. Many of these situations could be avoided if both spouses understood how each thinks about money and their long-term financial goals.
You should discuss how money could impact your current situation to how you would like to retire. Additionally, talking through what motivates you both about money and what drives you when it comes to money can be beneficial. You will likely have a different relationship with money, and knowing where you both stand is helpful. Marrying a big spender, for example, could be very hard for someone who likes to save a lot.
- Consider Combining Finances After You Marry
Most marriages allow you to combine your entire lives into one. This is the same when it comes to financial accounts. You can open a joint checking account, add your spouse as a user on your credit card, or make sure your spouse is listed on other financial accounts. This can help them get access to your accounts if needed, but it can also help one spouse if they happen to have a worse financial situation.
You’re both likely to have different credit profiles. Combining finances can help a younger or less experienced spouse establish more of a credit history. This can be valuable to that spouse and be a great tool to build credit for large purchases you’re likely to make together in the future, such as buying a home.
- Communicate Your Financial Liabilities
A big issue for many, when they get married, is that their spouse has significant financial obligations they need to be made aware of. This can be hard because spouses start to share responsibilities with their finances after they commit to each other. The last thing you want is for your spouse to have thousands of dollars in credit card debt without you knowing. This creates an immediate obstacle that you must both overcome together.
Both parties should be upfront about their financial liabilities so that each spouse can weigh the potential impact. Overcoming a bad financial situation is one thing, but getting blindsided after marriage can make it a much more difficult pill to swallow.
- Update Beneficiaries
All of your financial accounts that would pay out to a beneficiary in the unlikely event of your death should be updated to include your new spouse as the beneficiary. For many states, this is the default if you don’t name a beneficiary, but it is much easier for them if you add them beforehand. The types of accounts that you may want to make sure are changed include:
- Life insurance policy
- Savings accounts
- Checking accounts
- Investment accounts
- Retirement accounts
- Set a Budget, Together
Now that you know what liabilities you both have and understand how you are motivated by money, you should set a budget that will work for your lives after you get married. The budget will need to consider your new life together, including any current debt payments you both have and your joint expenses.
Agreeing to a budget is a significant financial step that can lead you both to a strong and healthy financial relationship. This is how you can take everything you know about each other financially and incorporate all of your future goals to tackle each one together. Not having a budget can lead to spending that displeases one spouse or doesn’t fully account for your overall financial picture.
- Don’t Forget Insurance
You may now need to buy new types of insurance after you’re married. After all, you are no longer only thinking about yourself when it comes to your finances. This can be especially important if only one of you works or if you’re making big money moves, such as buying a new home.
You may need to buy life insurance to protect against tragic events or consider bundling car insurance policies to save money. Additionally, getting insurance on your home, whether you buy or rent, and making sure you both are on the same health insurance policy are now considerations you have that you didn’t before. Most insurance considerations can protect your finances as they grow; some help you save money now.
Overall, getting married is a huge financial decision, not just an emotional one. Once you find the person you want to spend your life with, sharing your financial life with them is important. Understand their goals, how they relate to money, and how their current financial situation meshes with yours. This can help strengthen both your relationship and your finances as you look to grow your wealth and live a happy life.