Just got married? These Money Tips Are For You

It is commonplace that after you got married, you have to keep strong throughout your lives together through the ups and downs of emotional and financial aspects. To keep your finances on track as things will eventually change set money expectations right away and make financial plans together.

According to Ann Dowd, Vice President at Fidelity, don’t let disagreements about spending or different attitudes about money derail your newlywed bliss, recognize that you are partners in financial planning and take that partnership seriously. 

To help you successfully unite your financial lives, here are five ways:

1. GOALS should be set

Whether you are buying a new home, taking a yearly vacation, or planning for retirement, you should work both together to figure out what you can afford.

Next, practice having the habit of disciplined saving. We suggest that you should aim to save 15% of your income if you are saving for your retirement-- in tax-deferred savings account like a 401(k) or traditional or Roth IRA that includes any employer matching contributions.

You can automate your savings by setting up regular, automatic transfers from your bank account to your investment account if your retirement contributions are not automatically taken from your pay check or put into your account. And one less thing to think about is to consider setting up automatic transfers to your emergency savings as well. 

Finally, think carefully about how your investments can match your goals. Be sure to review your overall portfolio together to ensure that your asset allocation strategy is consistent and aligned though you both might come into the marriage with your own investments. 

2. Be Organized

This is the best time to start talking seriously about how you will manage money together. Part of your conversation should be as follow: what you owe, what you have, what you spend, and how you feel about investing. Financial secrets should be avoided. And, the best way to do it are as follow:

• All your shared assets should be listed: this includes both your loans and credit cards.
• Debts: talk about strategies on what’s the best way to pay down debt and save for your future goals. 
•  Talk about how you want to own assets: the mine, yours, and our agreement should be tackled. 
• Paperworks should be updated: important documents such as passport, driver’s license, Social Security, and credit cards. Be sure to update your beneficiaries too!
• Start a budget: list all expenses from day-to-day to emergency expenses, and all your income sources. 

3. Minimize taxes

To help minimize taxes and maximize your retirement savings, you need to review your tax withholding and the ways you invest once you are married.

You must fill out a new Form W-4, Employee Withholding Allowance Certificate when your marital status changes, you should fill it out with your number of W-2 withholding allowances and your correct marital status. Through these, the amount withheld from your wages for state and federal income taxes will be determined.  

For you to plan wisely for your long-term goals, tax-advantaged accounts like workplace savings plans, health saving accounts (HSAs), and IRA would be a big help. It is best to contribute as much as you can or at least enough to earn any company-matching contributions if each of you has a workplace savings plan like a 401(k) plan or 403(b) plan. An IRA offers the same tax deferral that will make you eligible on your tax return to be deducted by your contributions-- but that is if there is only one or neither of you has a workplace plan. There are more options available to people who are self-employed other than the IRA. 

You may be able to save in a health savings account (HSA) if you have a high deductible health plan. And for future or current medical expenses, you can also use the funds in an HSA to pay for both. 

4. Protect what is the most IMPORTANT

It is important to update, review, and if necessary in most cases purchase different types of insurance from health, disability, and life insurance. Your employer even provides some insurance coverage. But, as Dowd said, review your current coverage to see where you can cut costs and avoid redundant coverage-- that’s if both of you are working. For example, you might save a big amount if you will be on your spouse’s health insurance than to purchase and pay for your own.

5. Craft your WILL

In your estate, your will is the most important legal document. Through this, you can establish your wishes and requests on how the distribution of your estates should be. You should creat your will as soon as possible after you and your spouse will contact your attorney for more information. And, to make sure that your will will address your changing circumstances, be sure to review them every three to five years. 

To every newlywed, discussions about money are not always easy. But, it is always best to face it with an open mind and being one as a team.