Wedding planning has many parts that you must focus on for the big day, but have you thought about what comes after the big day is over? According to Money Habitudes, only 43% of people talk about money before marriage. Financial planning after marriage is important to discuss with your future spouse. Couples should be ready to talk about finances, including combining finances after marriage, combining insurance, merging credit cards and their financial goals for the future.
1. Discuss Your Financial Goals
Sit down with your future spouse and discuss the financial goals you both want to attain. It’s important to talk openly and honestly about your current finances and your future financial goals. What does saving money look like? What does your personal finance history look like? Discuss in detail what you would like to accomplish financially with your partner. Doing so will better prepare you both.
2. Prepare a Budget
Working together to create a financial plan is one of the most important financial things to do after getting married[JT1] . After setting your financial goals, you will need to set a household budget for those goals. The household budget should be a financial plan you and your partner set together. Do you plan on buying a house? Do either of you have student loans that need to be paid off? What does your vacation budget look like now that you have merged your finances? Preparing a budget for your future is crucial to better plan for expected financial responsibilities as well as unexpected responsibilities (i.e. car expenses, home expenses, etc.). When you have a budget in place, you are less likely to stress about your finances. A budget will allow for you to work towards your goals and stay on track.
3. Decide on Bank Accounts—Separate or Joint?
What will your joint finances in marriage look like? Should you create separate or joint accounts? There isn’t any right answer, it just depends on your goals and personal preference. However, it is important to have both a savings and checking account. Use a savings account to do just that — save money for the future. You should have an emergency fund set aside, which most financial experts suggest saving about six months of expenses according to this article from Investopedia. The checking account should be used for anything that you need to pay monthly and for any of fun expenses..
4. Consider Your Credit Cards
Merging credit cards after marriage can help reduce debt and help you stay within the budget you and your partner have set. If you’ve ever asked yourself what happens to your credit when you get married, there are a few credit risks to keep an eye out for. Getting married has no effect on your credit score or report with the national credit bureau — your credit history, and your spouse’s, will remain the same. It can, however, change what role it plays in the relationship between you and your partner. Your credit score is also important when buying a house. If you have bad credit, and you and your partner would like to get a lower interest rate, that credit won’t be of much help. It’s important to keep an eye out for your credit for larger future purchases. This brings us back to the first point — discussing how important it is to be open and honest about your finances with your partner.
How to Combine Insurance When Married
After a life event like getting married, insurance coverage should be on your radar as well. New married couples should talk about selecting the best health, life and auto insurance that is available.
Look at your employee benefits and go over the different types of insurance you currently have. Many times, it’s best to look at what your employer offers for married couples and families. Look to see if marriage counts as a qualifying event. This will allow you to upgrade your plan without having to wait for the next enrollment period for these benefits. Every newly married couple should review their current health plan options and see which employer offers the best plan for them.
Life insurance can help alleviate stress and worry for newly married couples. Life insurance has many benefits that couples should discuss and look into. Younger people don’t tend to invest in life insurance as much, but it’s most beneficial when you are young. The younger you are, the easier it is to get a great life insurance plan.
You have probably already heard about how safe driving can help lower your auto insurance. But what about when merging with your partner? There are a few ways to lower your auto insurance and bundling your cars into one account can also help.
Have Peace of Mind Knowing You’re Covered
We understand that this may be a lot to take in, but our local Fam Bureau agents are available to help you get started! They can help you figure out what is the best plan for you and your spouse.