After getting engaged, the wedding and honeymoon planning are likely the first things on any couple’s mind. The words retirement planning don’t often make their way onto the priority list until after the big day, sometime down the road. But there are reasons to be smart about addressing money in advance of tying the knot. After all, finances seem to be a top reason marriages fail and can cause conflict if two people are not on the same page.
It can be a big step for some to even address the subject of finances with a partner. It may be a starting point to share childhood experiences regarding money to understand where a partner’s habits or opinions originated. There can be an emotional connection to money and a healthy, honest conversation can bring things to light, settle differences and even bring a couple closer before that big day.
1.) Create a monthly budget and yearly budget. If one partner is a spender and one is more conservative, it’s a great idea to plan out the day-to-day and monthly finances. Additionally, establish a five-year and a ten-year plan. This provides a clear picture of the goals you’re both trying to reach, eliminates stress of the unknown and holds each other accountable. Your financial advisor can assist with your long-term planning.
2.) Decide if there will be a joint account or separate accounts, or both. If there are two incomes, it may make sense to have separate accounts in addition to a joint account. The shared account could be for savings and if one spouse makes more than another, the amount per month deposited into the joint account could be a percentage of earnings. Making sure you’re on the same page with accounts will help clarify financial roles.
3.) Dig out the tax returns, credit reports and share them. This very thought may make you uneasy, but there’s no better way to establish a solid financial foundation based on honesty with your partner. In some cases, it may come up that one of you hasn’t filed a tax return, or everything may in fact be all up-to-date with the IRS. If a large amount is owed by either spouse, it may be a good idea to not combine finances immediately. It’s better to make informed decisions and be aware of these financial details.
4.) Protect yourself and your assets. Getting married is an ideal time to review your current insurance policies, change beneficiaries, purchase life insurance, health insurance and disability insurance. Insurance coverage provided by employer’s is often not nearly enough. Or it may end up that it’s less expensive to be on your spouse’s health insurance plan than to pay for your own. Your financial advisor can help determine the best course of action for your overall financial picture as a newly married couple.
If you haven’t yet had a financial roadmap created, it’s the perfect commitment to start out your new lives together with peace of mind and everything financial in place for a happy, stress-free and successful future. Contact Bayntree Wealth Advisors at firstname.lastname@example.org or schedule an appointment with us today!
Bayntree Wealth Advisors, located in Phoenix and Scottsdale, Arizona, provides comprehensive financial planning and wealth management. The Bayntree team specializes in all aspects of financial health, including retirement planning, risk management, investment advice, tax strategies, estate planning and insurance.
Bayntree does not provide specific legal or tax advice. Please consult with your tax advisor or legal professional for guidance with your individual situation.