Finances for Two

Finances for Two: Newlyweds and Money
Money Management – June 2008
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. A total of 84% of couples said that money causes arguments in
their marriages, according to a Money Magazine survey. But taking the right steps now can save a
lot of tension and disagreement later, according to the Missouri Society of CPAs. 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 they had claimed. Your spouse will find out your financial
secrets at some point, so it’s best to reveal them before marriage so that both people enter the
union with realistic expectations.
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.
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.
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.
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.
Smart financial planning can help contribute to a long and happy marriage. Turn to your CPA for
advice on any important financial questions. To find a CPA near you, visit