Tips on marriage and finances
Getting married brings big changes for both you and your new spouse. Careful planning and communication can help you achieve long-term financial success together.
Discuss your future dreams and realities
It's a wonderful time to enjoy mapping out your new life together. Discussing your dreams and assessing your financial situation can help you define your goals as a couple. Some questions to consider include:
- Do you plan to purchase a home?
- Do you want to start a family?
- Do you have immediate debt, such as wedding expenses, school loans or other bills you want to pay off?
Make decisions about marriage and finances together
Along with planning for the big picture, make sure you discuss financial details that may affect you and your day-to-day budget.
- Budget. List out your monthly incomes and expenses.
- Separate and/or joint bank accounts. Having a joint account can mean fewer fees and simpler accounting but more negotiation, while keeping separate accounts can be easier if you are used to managing your own individual finances. Another possibility may be to set up a combination of joint accounts for shared household expenses and savings goals and separate accounts for personal spending. Discuss your preferences.
- Health insurance. If each of you has separate health insurance coverage, do a cost/benefit analysis for both plans. Which is better — the family plan or two single plans?
- Auto and home insurance. Can you consolidate auto policies and save? Also, when you buy a home or auto insurance policy, choose the highest deductible you can afford. It's the easiest way to lower your premium.
- Life insurance/disability income insurance. Consider life insurance and disability income insurance policies to make sure one spouse will be able to make ends meet without the other and protect your income in case of sudden illness or disability.
- Employer-sponsored retirement plans/IRAs. Take advantage of as many retirement savings options as your cash flow allows. With tax-advantaged contributions and tax-deferred potential growth, the earlier you start saving for retirement, the better.
- Credit cards. If one of you has poor credit, it can drag down the other's rating. If this is the case, you may wish to make the poorly-rated spouse an authorized user of the other's credit card and pay down the poorly-rated spouse’s debt as quickly as possible to boost their credit score. Of course, you’ll also want to understand the reasons the spouse is in debt to begin with so you don’t repeat the mistake together as a couple.
Other considerations when it comes to finances in marriage
Financial planning is an important first step to take in your marriage. The earlier and more often you discuss financial matters together, the more comfortable these conversations will be. Seeking professional guidance can also help you tackle more complex financial questions such as:
- What are your financial goals and how are they prioritized? How will you work toward these goals?
- Do you have adequate health, life, disability and property insurance coverage?
- How much should you be saving for retirement?
- What is your risk tolerance for investing? Do you and your spouse have the same tolerance for risk or do you differ?
- Do you have a plan to review/update beneficiaries?
- Have you executed or updated your will? Durable power of attorney or health care proxy?
- How you will handle your tax return depending on the timing of your marriage?
- How you will keep important records and documents now that you are married?
We can help you plan for your future
When you get married, your lives change. So does your financial situation. An Ameriprise financial advisor can help you start your finances off on the right foot with an eye toward your future dreams together.