Finances for Two: Newlyweds and
Money
June is a popular time for weddings, and it’s
important that newlyweds get off on the right foot as far as their finances
are concerned. A total of 84% of couples said that money causes arguments in
their marriages, according to a Money magazine survey. But taking the right
steps now can save a lot of tension and disagreement later, according to the
Iowa Society of Certified Public Accountants. Here are some recommendations
for getting the right start financially.
Be honest
To avoid unexpected surprises, talk before you tie the knot about each
person’s financial situation. A marriage is sure to get off to a rocky start
if one spouse learns that the other has thousands of dollars in debt or
earns far less than they had claimed. Your spouse will find out your
financial secrets at some point, so it’s best to reveal them before marriage
so that both people enter the union with realistic expectations.
Share your dreams
It’s also important to be candid about your financial hopes so that you’re
sure your spouse shares them. There could be disagreements down the road if
one spouse is aspiring to a luxury lifestyle while the other has a more
low-key approach in mind. Sit down together before the wedding and have a
truthful discussion about your income, your assets and liabilities, and
plans for the future. Talk also about how you will make financial decisions
in the future and how you will handle regular bookkeeping and investment
planning. Understanding each other now will cut down on disagreements later.
Get your documents in order
Marriage triggers several changes that should be reflected in key financial
paperwork. For example, you may want to add your new spouse as the
beneficiary for your insurance policies, 401(k) plan, individual retirement
account, investment and savings account, or any other assets. If you are
taking your spouse’s name, make sure the name change is made on your Social
Security card, driver’s license, and other identification, as well as on
insurance policies and bank or retirement accounts.
Review your insurance
A newly married couple may find that their combined insurance leaves them
with too much or too little coverage in some areas. If you are moving into a
new home or combining households, assess your homeowner’s or renter’s policy
to make sure it fully covers your new location. Look into each spouse’s
health insurance, as well, to see if one policy is cheaper and if it can be
used to cover both spouses. This is also a good time to begin analyzing your
life insurance options to ensure that each spouse is well provided for and
that you have chosen the policy that best suits your needs.
Look to the future
To set a sound foundation for your future, create a budget immediately that
is based on your newly combined incomes and monthly expenses, and stick to
it. A realistic budget can help you avoid financial problems and
disappointments down the road. It’s also a great tool to use when setting
your near- and long-term financial goals.
And, as you begin your new life together, don’t
forget to write or update your wills. This step will ensure that there are
no unnecessary delays with inheritances later.
Your CPA can help
Smart financial planning can help contribute to a long and happy marriage.
Turn to your CPA for advice on any important financial questions. To access “Find a CPA” on the web, go to
www.findanIowaCPA.com.
