Getting married is one of the most exciting and important times in our lives. While the details of the wedding and the honeymoon take center stage, it is vital to discuss and decide on certain financial matters as a couple.
For many of us, talking about money is uncomfortable. But, as money is the number one subject of conflict in married couples, it is something we need to address. It may feel rude to talk about how much money you have or to ask someone else about their money, but the benefits can add not only dollars to your balance sheet but equity to your relationship.
There are good reasons to open a joint bank account and good reasons to maintain individual accounts. A joint account is a simple way to combine finances to pay bills or to save. This can contribute to trust in the relationship and help spouses stay on track with their spending. Individual accounts, on the other hand, give spouses some individualized control over their spending. For many couples having both joint and individual accounts is the answer. Keep a central, joint bank account to pay bills and shared expenses, while also maintaining individual bank accounts for personal discretionary spending.
Do we need wills?
One smart decision after you get married is to make a will. With a will in place, your assets will be distributed as you want quickly and efficiently in the event of your death. Estate laws vary from state to state but dying without a will can be costly and time-consuming. In addition to a will is the power of attorney and living will (health directive), which need to be put in place in case of a medical emergency.
Update your beneficiaries.
Before getting married you may have listed another relative as your beneficiary. Now is a great time to change everything at once, including your beneficiary for your 401(k), 403(b), IRAs, pension, annuity, life insurance, etc. The named beneficiary on all these accounts supersedes the will, so this is really important to take care of. In the case of a previous marriage, it is vital to make sure your beneficiaries are up to date.
Develop a budget.
If you and your new spouse are combining your income and expenses for the first time, developing a budget can be a smart idea. This is especially true if one person in the relationship is more of a saver and the other is more of a spender. Although not everyone needs a budget, it’s a great way to start your life together on the right foot. The budget can and will change over time and can be a useful tool to stay on track.
Talk about retirement.
Even if you are already contributing to a 401(k) or an IRA, it can be smart to have a discussion with your spouse about retirement planning. If nothing else, it’s a good idea to make sure that you’re on the same page when it comes to long-term financial goals. The key to a blissful retirement is having you and your spouse moving in the same direction. If one spouse contributes 10% of their salary to a retirement account and finds out years later that the other spouse hasn’t been saving, it can create problems. It’s best to get on the same page from the beginning.
Work on your credit scores.
Maintaining a great credit score is important in order to buy a home, a car, or any other large ticket item. As a couple and as individuals, functioning with a low credit score can lead to paying higher interest rates for those items that we need and want in our lives. There is no married couple credit score—credit scores are only for individuals—so, it is important to pay bills on time and establish healthy credit.
Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. Jill Van Nostrand is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is an indirect, wholly-owned subsidiary of Guardian. Certified Financial Services LLC is not an affiliate or subsidiary of PAS or Guardian. OSJ: 52 Forest Ave., Paramus, NJ 07652, 201-843-7700 2019-90647 Exp. 12/21