From an engagement to a prenup to the wedding reception, money is at the forefront of basically all decisions related to getting married. Getting married means that you’ll be not only emotionally, but financially tied to another person for your lives together.
According to U.S. News and World Report, in a study conducted by The Harris Poll, more than a third of wedded couples say money causes the most stress in their relationships. Heading to divorce court can be even more financially stressful. It is important to have tough financial conversations with your significant other and consider these five important tips to make sure you start your marriage off right.
It is important to talk about your family history, income, and expenses, ideally before you walk down the aisle, and to be honest about all financial information. One spouse may enter the marriage with more debt than the other, so there must be an understanding of how you both will pay it down. One spouse may want a joint banking account and one may want those accounts to remain separate. These are the reasons it is vital to have open lines of communication with all financial information and concerns on the table. Discussions in advance will help to ensure that disagreements do not derail newlywed happiness.
Financial differences are often a reason for divorce. Creating a partnership when it comes to money can help you and your spouse to be on the same page about how you move forward together toward your future. A partnership includes a mutual understanding of spending, viewpoints on investing, thoughts on buying a home, and even how many kids might be financially desirable. These topics should all be part of the conversations as you develop your financial partnership and plan for your long-term goals.
When your marital status changes, you must fill out new forms to adjust the amount withheld from your wages for federal and state income taxes. You and your spouse will want to determine whose employer’s health insurance plan is least expensive and most beneficial, and you may also want to contribute to a Health Savings Account. Contributions to an IRA can also help minimize your taxes and plan for your long-term goals. Taking steps to make sure you’re doing everything you can to minimize taxes can help to maximize your retirement savings.
When you get married, your insurance needs to change, given you’re no longer single. You may want to purchase life insurance or even disability insurance to protect yourself and your spouse in case an unexpected event happens. Determining how much insurance you might need depends on how much you have through an employer, as well as how much would help to replace lost income and eliminate debts for the surviving and family members. Also, make sure to update your beneficiaries on any insurance and accounts to include your new spouse.
As you decide on your life goals together, you’ll need to work together to create a plan to reach them. For example, establish how much you’ll need to save of your income for retirement, such as 15 percent of your monthly paycheck. Decide on how much cash to put into your emergency savings accounts each month. Agree on how much you’ll spend on entertainment and dining out. Your plan should also include a will, which is the most important legal document that establishes your wishes for your estate after your death.
It is always a good choice to seek professional guidance when you’re developing your retirement plan with a new spouse. If you recently got married or are planning to get married and are in need of financial guidance as you make this life change, please schedule an appointment on Bayntree’s online calendar by selecting the date and time that is most convenient for you! You can also always reach us by emailing info@bayntree.com.
Bayntree Wealth Advisors 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.
