Money is an important part of life, but future newlyweds do not like talking about it. Sixty-eight percent of engaged couples hold negative attitudes towards discussing money with their significant others, according to a new poll by the National Foundation for Credit Counseling. Of those with negative views, 45 percent said it would be an awkward conversation, while 11 percent expected to find hidden issues. In order to avoid a fight, 7 percent would steer clear of the topic. In fact, 5 percent said talking about money would cause the wedding to be cancelled.
Getting married should be one of the most exciting events of your life. Whether you throw a lavish party with hundreds of guests, choose a more intimate affair with close friends and family, plan a destination wedding, or elect to travel to Vegas or your local courthouse, deciding to spend your life with someone is a monumental step. Whichever wedding you arrange, you’re bound to have years’ worth of special memories.
After all the partying is over, though, you will have to begin your life together. Give yourself a little time to just enjoy each other’s company and bask in your newfound oneness. Next, turn to the task of evaluating and changing the aspects of your life that need to be altered now that you are no longer single. Here are five important issues to keep in mind as you start a new life with your spouse.
1. If you decide to change your name
If you or your spouse chooses to change your last name, you will need to file for a new Social Security card. This is the first step you should take, because you will most likely need to legally change your name and obtain a new card in order to change your name on your passport, license, bank accounts, credit cards, insurance, and tax forms, as well as any other pertinent items that require your legal name. You should also inform your employer of any name changes, and if possible, let your employer know before you get married so that the can prepare any necessary changes.
In order to change your name on your Social Security card, you will need an original or certified copy of your marriage license in order to prove your legal name change; your license, state-issued nondriver’s I.D. card, or U.S. passport in order to prove your identity; and your birth certificate, certificate of citizenship, passport, U.S. Consular Report of Birth, or Certificate of Naturalization in order to prove your citizenship. You will then need to complete an application for a Social Security card and bring it to your local Social Security office.
2. Discuss your current finances
You may already have joint bank accounts with your spouse from before you were married. If you don’t, take the time to discuss how you want to store your money: Do you want to have all of your money in a joint account? Keep separate accounts? Maintain one joint account for bills, as well as two separate, individual accounts for spending money? It is very important to discuss your individual financial goals or plans and then agree on financial goals as a couple.
You will need to determine how you plan to pay for joint bills — such as groceries, utilities, and rent or mortgage — as well as bills that were originally separate, for example, student loans, car loans, etc. If both of you come into your marriage with considerable assets, you may want to contact a financial adviser such as Edward Jones. Designing a budget that you both agree on will help you avoid financial arguments and also plan for your financial future. Because arguments about money are the top predictor for divorce, it’s best to consider and plan for potential financial issues ahead of time.
3. Update your insurance and wills
Once you’re married, you have to think of your spouse and plan accordingly just in case the unthinkable happens. The scale of updates can be huge, from small changes like insuring your new wedding rings to updating much more important details, like the beneficiary name on your insurance and 401k and updating your will. If you are part of a group plan, you can contact your human resources department to update your insurance.
If you are self-employed, you may need to contact the insurance company yourself. You also may want to change your insurance depending on whether you or your spouse has better coverage. If your new spouse has children, this also could affect how you update your will. Obviously, you will want to have your spouse on your will, but you also might want to add your spouse’s children or other family members. If one or both of you have yet to set up any sort of will, do it as soon as possible. Several online websites, including LegalZoom, offer plans for designing a will. You can also enlist the help of a local attorney.
3. Discuss your current finances
You may already have joint bank accounts with your spouse from before you were married. If you don’t, take the time to discuss how you want to store your money: Do you want to have all of your money in a joint account? Keep separate accounts? Maintain one joint account for bills, as well as two separate, individual accounts for spending money? It is very important to discuss your individual financial goals or plans and then agree on financial goals as a couple.
You will need to determine how you plan to pay for joint bills — such as groceries, utilities, and rent or mortgage — as well as bills that were originally separate, for example, student loans, car loans, etc. If both of you come into your marriage with considerable assets, you may want to contact a financial adviser such as Edward Jones. Designing a budget that you both agree on will help you avoid financial arguments and also plan for your financial future. Because arguments about money are the top predictor for divorce, it’s best to consider and plan for potential financial issues ahead of time.
4. Plan for the future
This goes hand-in-hand with point three. Even if you discussed and planned all of the above before walking down the aisle, setting a long-term budget can also be an important step for newly married couples. Once you have discussed your current finances and agreed on a monthly budget, consider planning for large costs that may come further down the road. Once you are married, you will have to set aside money for items you want to purchase as a couple — think furniture, cars, vacations, etc.
If you plan to have children, you can start saving for related costs now: hospital costs, daily essentials, trips, education, etc. You also may want to start saving for a home, begin setting aside more for your retirement as a couple, or plan for the inevitable aging (and perhaps the aging of your parents, if that is a road you want to go down). Because these potential financial issues can be daunting, start with making a budget for your immediate concerns. When you feel comfortable with your present as a couple, start thinking about your future.
5. Determine how marriage will affect your taxes
Aren’t taxes fun? As if completing taxes wasn’t already a big enough headache for singles, when you get married, you have to learn how your new title as a Mr. or Mrs. affects your taxes.
Once you are married, several things change when it comes to your taxes. The most obvious change is that your filing status changes: The only statuses you can claim are married filing jointly or married filing separately. Your income also might be taxed differently, because your income bracket might change once you marry. You also will have increased exemptions — married couples can claim two personal exemptions if they file jointly; your standard deduction will be highest if you file jointly.
If you choose to claim an additional exemption and deduction, you may want to change your W-4 to have less taxes deducted from your paycheck. In addition, if you purchase a home together or have children together, your taxes will change again. Spouses are also able to gift each other unlimited amounts free of taxes. These are other tax changes depending on your own personal finances, so be sure to discuss these issues with your partner.
Being newly married should be a fun and exciting era, so take the time to consider the items on this checklist now. If you make it a priority to get everything in order and to have a strong financial foundation now, your marriage will be off to a great start.
(via Wall St. Cheat Sheet)
