Marriage brings financial changes for the newlyweds that impact all aspects of their shared lives. Everything from personal financial goals to credit card debt will face new challenges in the relationship. The new partnership also means new ways to manage personal finances, although many couples have questions about what to ask and where to start.
Should we create joint accounts or keep accounts separate?
Newly married couples should ask one of the first questions about their bank accounts. Should you keep separate accounts or put everything into a joint account? Additionally, should you have a mix of joint and individual accounts? Regardless of the decision you make, this is an important issue to address as you start your life together.
When is the right time to discuss our finances?
The key to successfully managing money in marriage is good communication. Many couples find it difficult to talk about money, often leading to problems down the line. You may remember the stress that money can cause when you are single, so imagine how much more stressful it can be when you are married.
Don’t let small issues or assumptions turn into big problems. From the start, be open with each other and talk about your financial concerns. If one of you is bringing significant debt into the marriage, don’t hide it. Be honest and devise a plan to pay it off. People don’t have identical values when it comes to money. Therefore, open communication helps clarify what is important to each of you. Then you can make the best decisions regarding your finances as a couple.
How can we create a budget?
It’s important to decide how to allocate your bank funds, but this is also the time to start creating a family budget. The new spouse may bring assets or liabilities to the household, along with spending habits that could be completely different from yours. If you are used to budgeting on your own, adding the new financial pieces will definitely change the new budget.
Sit down with your spouse and review the combined cash flow between you. What debt payments will you have? How do your incomes match up? How much can you save? Can you find ways to combine expenses, like switching to the same wireless phone plan? Are there any expenses that can be eliminated? Answering these questions together will help you create the most realistic budget for your married life.
How can we handle beneficiaries?
Now that you are married, you will need to make important decisions regarding insurance and financial planning. If both of you are working and covered under a health plan through your employers, check which plan will be more beneficial. For example, does one plan offer lower premiums or a wider range of doctors? Does your spouse’s plan cover pregnancy, or have other benefits that are not available in yours? Marriage is one of the events that allows you to change your health insurance choice without waiting for an open enrollment period, so use this time wisely.
In addition to health insurance, use this time to discuss life insurance. When you are single and do not have children, there may be little need for life insurance as it only depends on your income. When you get married, you should discuss what will happen if the other spouse is no longer able to support your family and consider whether life insurance would be appropriate. A sudden loss of income can be devastating for a family.
Even if you don’t have children yet, life insurance can help cover funeral costs or any debts you leave behind, such as student loans or a mortgage.
How
Can we address retirement planning?
Once you have secured health and life insurance benefits, you will also want to consider the beneficiaries on your current retirement plans, pensions, individual retirement accounts, and any other assets. By designating beneficiaries on these accounts, you can ensure that your assets will transfer correctly upon your passing.
Don’t forget to take advantage of the various retirement accounts available to help with your tax situation. This includes an employer-sponsored 401(k) plan or a similar plan with tax advantages, as well as traditional and Roth individual retirement accounts. With two incomes, it can be a great time to start saving for retirement and saving money on taxes at the same time.
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Source: https://www.thebalancemoney.com/planning-marriage-and-money-1289663
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