On account of our three year anniversary, I thought it would be a great idea to discuss the finances of a newlywed couple since it’s so fresh on my mind. Based upon the decisions that you made in the first article in this series, 6 Financial Topics to Discuss Before Marriage, there are several things you will need to do for a smooth financial transition after the honeymoon.
Word of warning: Try to hold onto that wedded bliss and smile throughout this process, as you are bound to run into some situations, issues, or get frustrated at the amount of time and paperwork all of this can take. I know I was surprised!
Change Names on Financial Accounts
Once you have your new identification (if you chose to change your name), or once you are ready to combine finances (if you chose to combine finances), then it is time to actually add names to accounts. You might want to take this as an opportunity to open a new account together with a bank offer attached to it (replenish some of those savings or kick start that emergency fund!).
Be ready with your new identification (driver’s license) and potentially your social security cards. Check with your financial institution to find out what specific documentation they require. I found that it was just easier to do this entire process in person, and we used our lunch breaks to take care of one institution at a time. You may be able to accomplish this online, but be prepared to submit documents with potential notarizations through the mail if you choose to do so. In addition, be sure to ask about any fees to change your name.
Agree on a Budget
I would like to say that our first budget meeting was smooth sailing, and that we both agreed on all of the amounts in each category. This was simply not the case, and it’s okay that it wasn’t. There are now two people involved in finances, and each of you will be bringing a different set of priorities for saving and spending. Take this time to educate each other on your priorities, suggest ways to budget, compromise, and try out a few budgets until you both feel comfortable. There are many ways to manage money in your marriage.
Sadly, it took us over two years to finally change all of our beneficiaries to reflect our new circumstances. I do not recommend this, as it could cause a huge financial hassle on top of the emotional upheaval death or disability can bring.
This is not to say that it will not be a huge hassle. We had to call and/or fill out paperwork for each of our accounts. Some required a notary, others did not. A good time to take care of this would be when you are already changing names on accounts above. Might as well just make one trip to the bank, right?
Combine Insurances for Potential Savings
If you both have employer-sponsored healthcare plans, then you will want to check the cost of putting a dependent onto each. For my husband and me, it would cost $130 to put me onto his insurance, and almost $200 to put him on my insurance. My own health insurance was free to me, and his cost for himself was $160 per month. Therefore, it did not make financial sense to change either of our healthcare plans.
Also, check out your car insurance policies. You may want to go with the same company and policy. A marriage financial perk is your car insurance should lower now that you are no longer single, so be sure to ask the company that you choose to go with.
Fill Out Your First Tax Return Together
Decide on who will fill out the income tax returns (alone, or together), or if you will have a service do your taxes for you. It is easiest to have a large envelope in a central location so that when each of your tax documents comes in the mail (employer documents, interest earnings, student loan debt, charitable tax deduction sheets, etc.) you can make sure they end up in one location. Before you begin the process remember to go through all of the documents in this envelope together to ensure that everything has been accounted for on each of your sides.
Be aware that there are two different ways to file your taxes when you are married: married filing jointly or married filing separately. You will most likely want to determine which way will ensure you owe less tax for the year. You may also wish to familiarize yourself with the “marriage tax penalty”, which may impact some couples.
Remember that you are in a transition period right now, and that things will take time to run smoothly. Take this time to learn how to delegate and to work together. Here’s to your future!