Money Checklist For Newlyweds

| October 16, 2019
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Getting married can be one of the most exciting times in your life, but it can also be stressful and confusing. As with any major life change, marriage comes with a long list of financial topics that need to be addressed. Here’s a list of financial tasks to complete once you get married - or even before, if you’re up to the challenge. It’s not a comprehensive list, but it’s a good start.

Define your family values

How is this on the list of things to do with your money? How we use our money is often times a reflection of our values, so if you want your money decisions to reflect your true values, it’s important to define what those values are.

Individually, write down your top 10 values. If you want some help, just Google “list of values” or “value examples” to get some ideas. Some examples are things like family, safety, fun, generosity, faith, etc. Once you and your spouse have each created your own lists, have a discussion about what you wrote down. Now is not the time to criticize or judge your spouse’s list. It’s a time to ask questions and get to know more about your spouse, and why those things are important to them. Ask things like “What about ‘fun’ is important to you?” or “what about ‘hospitality’ is important to you?”.

Discuss goals

With you and your spouse’s values in mind, create some goals. How can you be intentional about living out your values with your money? For example, if you value hospitality, perhaps you can create a goal of hosting a dinner with friends once a month or once a quarter. If you value your marriage (probably a common one for newlyweds!) and quality time, maybe you make a goal to have date night one a week, or every other week. If you listed your generosity, maybe you create a goal to volunteer on a regular basis, or to give to nonprofits each month.

As you create your goals, don’t worry about getting too specific quite yet. Give each other the opportunity to be creative and talk about things that might not be within reach quite yet. Share your wishes and dreams with each other without saying “we can’t afford that” or “that’s not possible”. Telling your spouse about your dreams doesn’t lock you in to the purchase. This is another opportunity to learn about your spouse. Ask questions about why those specific goals or dreams appeal to your spouse, and weave in those values you listed.

Form a spending plan

With your goals and values in mind, create a spending plan. Consider how much you make each month, and decide where that money should go based on your goals and values. Obviously, some spending won’t line up with your values. I’m guessing few people would list “taxes” as a value, but if you have to pay quarterly taxes, you have to budget for that. Maybe you don’t value food as anything more than just a way to fuel your body, but you still have to buy groceries.

This is when it’s helpful to think about needs, wants and wishes. Needs are things you can’t avoid, so you have to pay for those first. Don’t be too liberal with the definition of “need” here. Needs are things that you can’t live without, like food, shelter, clothes, etc. Further, the amounts you spend on each of those things can go from a need to a want. You need to spend a certain amount on food, but $500 per month at restaurants between a married couple is more than just a need.

If there’s any monthly income left over, you get to think about your goals that are more of wants or wishes instead of “needs”. These are things like travel; dates; giving; upgrading a house, apartment or vehicle; prepaying your loans to get out of debt; saving for retirement; etc. Prioritize your goals based on your values. Now IS the time to get more specific with your goals. Earlier, you were just brainstorming about how your money can reflect your values. Now, you’re really living that out. If you value generosity, how much money are you going to give to non-profits, or as gifts to others? How much are you going to spend on dates if you want your money to reflect that you value your marriage? How much are you going to spend on travel if you value new experiences?

With that being said, from a financial planner’s perspective, I would encourage you to think about some goals that you might not have listed as a need (remember, needs are things you literally can’t live without), but that are still pretty important, particularly right after you get married…

Create an emergency fund

A healthy emergency fund is typically 3-6 months’ worth of spending. Emergency funds are to prepare you for the unknown, like a job loss or short-term disability. Emergency funds are NOT to pay for upgrading your car when your old car still worked, or other random impulse buys. If you don’t have money set aside in cash for the unknown, consider saving a certain amount each month in a savings account meant solely for your emergency fund until you have a sufficient amount.

Review your insurance coverage

Now that you’re married, you’ll need to reassess your insurance coverage. Assuming you already have the proper automobile insurance and renter’s or homeowner’s insurance, you’ll need to reconsider your life insurance and disability insurance. These products are meant to protect your income, and your goals related to income protection might have changed once you got married. Think about what you might need if one of you passes away or becomes disabled, and then talk to a trusted insurance agent or financial planner.

Select your work benefits

Marriage is usually one of those “qualifying event” exceptions, meaning you can change your benefits after you get married without having to wait until open enrollment. Often times, your work benefits will need to coordinated with your insurance coverage – the previous checklist item. Consider the alternatives of group life insurance versus private life insurance. Group coverage is sometimes cheaper for younger employees and might not require you to apply. However, if you leave your employer, you can’t take that policy with you, and you run the risk of something happening to you before that job change that disqualifies you from acquiring a new policy if you leave. It’s wise to talk through these options with a financial planner, insurance agent, or both.

Talk to an estate planning attorney

Marriage is one of those life events that warrants a discussion with an estate planning attorney. You need some basic estate planning documents. One of those documents is a will, which defines what happens to your assets once you pass away. If you have children, you can also define who you intend to be the guardian of your children. If you don’t have children, you can list who the guardian would be if you have children in the future. Other important documents are a durable power of attorney and healthcare power of attorney. These documents list who has the authority to make decisions on your behalf in case you are unable to do so. At Flagstone, we believe it’s important to talk about these decisions with a qualified attorney who specializes in estate planning. Don’t use an online service provider. Your estate plan is not somewhere to skimp out, and basic estate planning documents written by an estate planning attorney aren’t too expensive, considering how important they are.

Consider your retirement savings

Finally, consider how much you are saving for retirement. My guess is that your goals probably weren’t too focused on retirement, because that’s typically in the distant future for newlyweds. However, saving for retirement at a young age can have significant long-term benefits. The younger you start, the less you have to save because of the benefits of compounding. Further, retirement savings can have some tax advantages, and systematized, recurring savings can prevent you from wasting money on things that you don’t value.

Make an appointment with a fee-only financial planner

Working with a financial planner to coordinate all of these topics can give you confidence and peace of mind if you’re on the right track, can save you the time of having to research all of your options, and can help you avoid common mistakes that newlyweds make. The fee you pay to a financial planner can sometimes line up with your values, too. If you listed efficiency, optimization, discipline, maximizing, quality time, quality work or competence as values that are important to you, hiring a financial planner might be a way for your spending to line up with your values.

 

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