Finances for Two: Newlyweds and Money
June is a popular time for weddings, and it’s important that newlyweds get off on the right foot as far as their finances are concerned. According to a Money magazine survey, 84 percent of couples said that money causes arguments in their marriages. But taking the right steps now can save a lot of tension and disagreement later, according to the Virginia Society of CPAs (VSCPA). Here are some recommendations for getting the right start financially.
To avoid unexpected surprises, talk before you tie the knot about each person’s financial situation. A marriage is sure to get off to a rocky start if one spouse learns that the other has thousands of dollars in debt or earns far less than he or she claimed. Your spouse will find out your financial secrets at some point, so it’s best to reveal them before marriage so that both parties enter the union with realistic expectations.
Share your dreams
It’s also important to be candid about your financial hopes so that you’re sure your spouse shares them. There could be disagreements down the road if one spouse is aspiring to a luxury lifestyle while the other has a more low-key approach in mind. Sit down together before the wedding and have a truthful discussion about your income, your assets and liabilities and plans for the future. Talk also about how you will make financial decisions in the future and how you will handle regular bookkeeping and investment planning. Understanding each other now will cut down on disagreements later.
Get your documents in order
Marriage triggers several changes that should be reflected in key financial paperwork. For example, you may want to add your new spouse as the beneficiary for your insurance policies, 401(k) plan, individual retirement account, investment and savings account or any other assets. If you are taking your spouse’s name, make sure the name change is made on your Social Security card, driver’s license and other identification as well as on insurance policies and bank or retirement accounts.
Review your insurance
A newly married couple may find that their combined insurance leaves them with too much or too little coverage in some areas. If you are moving into a new home or combining households, assess your homeowner’s or renter’s policy to make sure it fully covers your new location. Look into each spouse’s health insurance, as well, to see if one policy is cheaper and if it can be used to cover both spouses. This is also a good time to begin analyzing your life insurance options to ensure that each spouse is well provided for and that you have chosen the policy that best suits your needs.
Look to the future
To set a sound foundation for your future, create a budget immediately that is based on your newly combined incomes and monthly expenses, and stick to it. A realistic budget can help you avoid financial problems and disappointments down the road. It’s also a great tool to use when setting your near- and long-term financial goals. And, as you begin your new life together, don’t forget to write or update your wills. This step will ensure that there are no unnecessary delays with inheritances later.
Your CPA can help
Smart financial planning can help contribute to a long and happy marriage. Turn to your CPA for advice on any important financial questions.
The Virginia Society of Certified Public Accountants (VSCPA) is the leading professional association dedicated to enhancing the success of CPAs. Founded in 1909, the VSCPA has 9,000 members who work in public accounting, industry, government and education. For general information, please visit the Press Room on the VSCPA website at www.vscpa.com, e-mail firstname.lastname@example.org or call (804) 612-9424. To search for a CPA in your geographic region, visit www.financialfitness.org and click on “Find a CPA.”
©American Institute of Certified Public Accountants