How Should You Approach Finances When You Are About to Get Married

Ken Weingarten |
Categories
Retirement
Cash Flows
Estate
Insurance
Savings

It can be an exciting time for those who are about to get married. The anticipation of the ceremony, the honeymoon, and every other day after that is uncharted territory which will be explored together. As such, there is an area of this uncharted territory which will inevitably be explored as well: personal finances. Having these conversations amongst each other and organizing finances together should be an important step in this new chapter in each other’s lives. Below is a checklist which can help facilitate this discussion:

Cash Flows

  • Set up a system to access bills, either physical or digital, to easily pay them.
  • If finances are being combined, create a budget on which both can agree on.
  • Consider increasing or setting up an emergency fund to cover both spouses.
  • If there is a name change, update driver licenses, passports, bills, etc.
  • Discuss short-term goals such as a new home, new car, vacations and how to budget for them.

 

 

Retirement

  • Discuss long-term goals such as retirement age, plans during retirement, major purchases, etc.
  • Set up an investment allocation plan that factors in your risk tolerance as a couple.

Insurance

  • Health insurance coverage options may have to be reviewed as one spouse’s coverage may be sufficient to cover both.
  • Consider purchasing or increasing life insurance coverage.
  • Consider purchasing or increasing disability insurance coverage.
  • Property & Casualty (Auto, Home, Umbrella) policies should be reviewed and updated.

Estate

  • Reviewing and updating each other’s Wills, Power of Attorney, and Advanced Health Directive documents to include each other should be a crucial step.
  • Beneficiary designations on retirement accounts and life insurance plans should be reviewed and updated.
  • Set up a system of password management in the event one spouse is incapacitated.

Taxes

  • Tax planning may be needed if finances are being combined. If filing jointly, spouses may be pushed into a higher tax bracket.

College

  • If having a child(ren) is on the horizon, consider opening up a 529 plan. It is never too early to start saving up for college.

 

Everything considered, this is a good starting point for having this big discussion. Forming good money management skills as a couple early in a marriage can serve both well in the long-term. Some topics may require more in-depth work and it is recommended that a financial planner be consulted when moving forward.

Weingarten Associates is an independent, fee-only Registered Investment Advisor in Lawrenceville, New Jersey serving Princeton, NJ as well as the Greater Mercer County/Bucks County region. We make a difference in the lives of our clients by providing them with exceptional financial planning, investment management, and tax advice.