After many months of planning, a wedding is a time of celebration. Marriage marks the beginning of a new chapter in life, bringing with it a host of exciting changes and responsibilities. One of the most crucial aspects newlyweds need to address is their financial future together. Merging finances, setting goals, and creating a budget can lay a strong foundation for a stable and prosperous life ahead.
Here’s a financial checklist to help newlyweds navigate this journey with ease and confidence:
1. Open Communication About Finances
The first step towards successful financial planning is open and honest communication. Sit down with your partner and discuss your financial histories, including any debts, assets, and spending habits. Understanding each other’s financial background will help you create a unified approach to managing money.
2. Create a Joint Budget
A well-planned and organized budget is the cornerstone of financial stability. Start by listing your combined income and expenses to get a clear picture of your financial situation. Categorize your expenses into fixed costs (like rent or mortgage, utilities, and insurance) and variable costs (such as groceries, entertainment, and dining out). Identify areas where you can cut back if needed and allocate funds towards savings and investments. Having a joint budget not only helps in managing day-to-day expenses but also ensures that you’re saving for future goals.
Organizing joint assets may include:
- Combining bank accounts, credit cards, etc.
- Deciding which assets (bank accounts, automobiles, etc.), if any, should be re-titled to joint ownership. If there has been a name change, asset titles should be reviewed and addressed.
- Contacting the Social Security Administration to file a name change request. For support completing this task, visit https://www.ssa.gov/personal-record/change-name.
3. Set Financial Goals
A budget should reflect and support your overall financial goals. Whether your goals may be paying down debt, saving for a down payment on a home, or saving for a household emergency fund, your goals will be unique to your financial situation. It’s important to consider what the financial priorities of your household might be.
Some opportunities that might help you set those goals and create a joint budget:
- Consider delegating tasks or responsibilities for each spouse, such as paying the monthly credit card bill or the mortgage.
- Establish a savings program for a specific goal such as a down payment on a house, an emergency fund that covers 3-6 months’ worth of living expenses, etc.
- If you are carrying significant debt, you may also want to create a plan to pay off that debt.
- Determine the potential impact of your marital status on your next tax return and estimate your marginal tax bracket to save accordingly. For many couples, filing a joint return will generally make the most sense. However, in some cases some couples may file separately. It’s important to consult with your tax advisor to plan for tax time and discuss any withholding changes that might need to be made. Learn more about filing an tax related items to review from the IRS: https://www.irs.gov/newsroom/tax-to-dos-for-newlyweds-to-keep-in-mind.
- Review insurance policies to ensure you have adequate coverage, including life, disability, health, auto, home and rental. Do any of your policies need to be updated?
- Consider opening a joint retirement account and exploring other investment opportunities to grow your wealth over time.
4. Review Employee Benefits
Reviewing your employer-provided benefits plan(s), such as health care coverage, to determine if any updates need to be made or if it makes sense for one spouse to drop coverage from their employer and be added to the other spouse’s plan.
5. Finalize Key Documents
- Establish a healthcare proxy. Executing a healthcare proxy is important so each spouse can access health-related information for their partner.
- Consider an advanced directive and power of attorney. These documents are typically prepared at the same time as the healthcare proxy designation. They provide instructions for healthcare and financial decision-making for the spouse in case of an emergency.
- Update beneficiary designations on any retirement accounts or insurance policies.
- Work with a legal professional to establish a last will and testament and plan to keep up it updated every so often.
6. Seek Professional Advice.
Couples may want to begin this phase of planning by seeking professional advice from a financial professional. This can help couples to establish a comprehensive and sound financial plan. If you are not married yet, it’s not too early to start the process and prepare for the steps you will take after marriage as a couple.
Work With Us
At Gainspoletti Financial Services, we know that everyone’s financial situation is unique, which is why we carefully craft each plan or consultation specifically for a person. We believe it’s never too early or too late to start planning, especially for couples entering a monumental life transition such as marriage.
Remember, the key to successful financial management is ongoing communication, regular check-ins, and a willingness to adapt as your life and goals evolve. Here’s to a prosperous and happy future!
Contact us to learn more and start planning for the well-being of your financial future!
The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing materials are accurate or complete. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Gainspoletti Financial Services and not necessarily those of Raymond James. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Raymond James and its advisors do not offer tax or legal advice. You should discuss these matters with the appropriate professional.