By Tina Byland
You’re sitting at the gate waiting to board the plane. It’s been a blissful week of honeymooning at the beach with your new husband or wife. Now that the wedding and honeymoon are over, it’s back to your new normal. And it’s also time to discuss, if you haven’t already, what your finances will look like as a married couple.
Use this checklist for guidance and you’ll be off to a great start.
Discuss habits and lifestyle.
It’s important to take into account your memories, expectations, and life goals when discussing your finances as a married couple. Often, we have ideas for what our family life will be like based upon how we were raised. Talk about these from the beginning and keep them in mind when planning for the future.
Adjust your withholding allowances for your taxes.
The more withholding allowance you have, the more money you take home from your paycheck. Should you file separately or jointly? Hire an accountant to help you figure out the best tax scenario for you and your spouse.
Crunch the numbers.
Not just your paychecks. Add up all of your debts and assets so that you can determine your actual net worth. This is also the time to compare credit reports (and share any elephants hiding in your financial closets).
Create an 80/20 budget.
Keeping in mind your debts, habits, and goals, create a realistic budget for yourselves. Consider using the 80/20 rule. In this scenario, you live off of 80 percent of your income and save 20 percent of your income. If you have substantial debt, some experts recommend living off of 70 percent of your income instead of 80 percent to help cut into your debt. Regardless of the avenue you take, make sure you have enough to live off of and you aren’t putting yourselves in even more debt.
Decide whether to have joint or separate accounts.
You can have either of the two, or a combination of the two. Whichever you choose, make sure it makes the most sense for your personal situation.
Pay your bills.
This one sounds easy, but you must communicate. Who will be paying the bills? If you designate one person, make sure they are paying each and every bill. If you are splitting up the bills, make sure nothing falls in the cracks.
In sickness…. update your beneficiaries.
Check your financial accounts for who the current listed beneficiary is on each one. It is likely you will want to update these accounts to list your spouse. Also update your wills (or create them) and give your spouse power of attorney. These seem like hassles at the time, but the hassle you will deal with later on if they aren’t done outweighs any inconvenience now.
And in health… set a minimum threshold cost for big purchases.
Agree to discuss purchases above a set dollar amount. This is a great way to avoid getting into arguments about spending habits. The point is to give each other spending autonomy and trust.
Reevaluate insurance policies.
Does it make sense to go under the same insurance plan now that you are married? Also discuss life insurance, disability, home, and auto insurance. If you plan on expanding your family in the near future, take a close look at how that may impact your insurance choices.
Set up the foundations of your financial house at the beginning and you’ll find yourselves ready for whatever life throws your way.
