Understand your partner’s history with and feelings about money. Here are some talking points to kick off the conversation:
- How did your family treat money while you were growing up?
- Would you consider yourself a spender or a saver?
- What would you be willing to go into debt for, and how much debt would you be willing to carry?
Fully disclose your current financial situation. The subject of debt is particularly important because your partner’s debt may become yours, and vice versa.
- How much do you earn, spend and save?
- What are your assets? Do you have financial accounts or assets, or own homes, vehicles or art?
- What are your debts? Be sure to include mortgages, auto loans, credit card debt, student loans, etc.
- Have you experienced a bankruptcy, foreclosure or other problems paying off debt?
- Do you expect or want to provide support for loved ones?
Align on your budget and spending. Budgeting can empower you to spend within your means while moving toward your financial goals.
- Align on the lifestyle you want to share, including where you want to live (and whether you rent or buy), how much to spend on cars, hobbies and travel, and how much you want to save.
- If you decide to combine finances, build a joint budget. If you want help with this step, ask your financial advisor for additional resources.
- Agree on how often you’ll review your spending and saving together.
Talk about your plans regarding growing your family and your career hopes.
- If you decide to grow your family, would one partner stop or reduce working to provide child care?
- Are you expecting a significant change in income? How would you adapt to the change?
- Do you want to change careers, pursue a new passion or go back to school?
- Are there other major changes, such as moving, that you want or expect in your future?
Discuss your financial goals and dreams.
- Each of you can make a list of your short-, intermediate- and long-term financial goals and dreams.
- Check your lists to see where there’s overlap. Also, some goals may be more important to one partner than another.
- If sharing expenses means saving money, determine whether you can put that extra money to work toward your goals.
- Consult with a financial advisor to help prioritize your goals and make progress toward them.
Discuss what will be combined or kept separate. When it comes to sharing finances, there’s no one right answer. The key for each couple is to agree.
Keep in mind that depending on your state’s laws, your assets and debts may be considered joint property even if you keep your accounts separate. If you’re interested in keeping property separate, you should consult with an attorney to determine the best way to accomplish this.
- Will you combine income into a single account, will each partner keep their income separate, or will you use a combination of the two?
- How will you cover expenses? Are some expenses (including debt) the sole responsibility of one partner?
- Which accounts will be joint versus separate? Note that retirement accounts can’t be held jointly.
- Is there any existing property (such as a home or car) that you want to retitle to include both partners once you’re married?
Determine who will manage the money. The key is to be on the same page so you’re both comfortable with how the responsibilities are split.
- Who pays which bills? Have a clear agreement for who is responsible for what.
- How will savings and investment decisions be made?
- Who files the taxes? If only one partner files the joint return, both partners should watch for (and share) tax bills, refunds and statements they may need to file correctly.
- When do you consult each other on financial decisions, and how will you decide on issues that affect you both?
- Is there a spending threshold (e.g., $200) over which you automatically consult your partner?
Consider a prenuptial agreement. A prenuptial or premarital agreement, also known as a prenup, is a legally binding contract a couple signs before marriage that’s meant to outline how assets, debts, future income, inheritance and even spousal support will be handled during the marriage and upon death or divorce.
When valid, it supersedes state laws, so a couple can make their own rules. But it’s important to note that a prenup cannot dictate child custody arrangements.
Not every couple needs a prenup, but it’s worth considering, especially if you have substantially different levels of assets or debts, are anticipating large inheritances or are planning to blend families.
Take advantage of your special enrollment period for employer benefits. If you or your partner is employed, you may be able to take advantage of each other’s employer benefits to minimize costs while maximizing value. Newly married employees usually have a 30-day special enrollment period to update certain benefit elections.
If getting married means more income and/or lower expenses, revisit your employer-sponsored retirement plans to see whether you can boost your contributions.
If you’re changing your name
If you decide to change your name, make sure you get multiple copies of your marriage certificate. Contact the Social Security Administration to update your Social Security card. You’ll then want to update your name on other forms of identification, financial accounts, employer and medical records, etc.
Don’t wait until April to think about taxes. There are two actions you should take when you get married that could impact your taxes.
- Adjust your tax withholding on your employee Form W-4 to reflect your marital status. If you’re part of a dual-income household, you may want to consult with a tax professional or use the IRS Tax Withholding Estimator first.
- Ask your tax professional whether separate or joint tax-filing status is more appropriate for your situation.
Revisit your insurance policies.
- Combine policies where it makes sense.
- Consider your homeowners/renters, auto and umbrella policies.
- As mentioned above, determine whether adding your spouse to your health care policy is a good option.
- Update policies where needed.
- Add users, such as a spouse who drives your vehicle.
- Consider adding your wedding rings to your homeowners/renters policy.
- Ensure you have enough life insurance and update your beneficiary (in coordination with your estate plan) if necessary.
Ensure your family is taken care of if anything happens to you. As your family grows, it’s important to ensure your loved ones are protected should anything happen to you.
- Work with an attorney to create or update a will, medical directive, financial power of attorney and health care power of attorney. Explore whether a trust is appropriate.
- Follow your attorney’s advice about updating your account titling and beneficiary designations. You want them to coordinate with your estate plan as well as your decision to keep joint or separate accounts. Make sure you’re considering checking, savings, investment and retirement accounts, authorized users on credit cards, and property (such as a home or car).
