Monday, May 23, 2011

Marriage and Money!

Today I'm actually reposting part of a fabulous article from on money management for newlyweds. These are great things to start thinking about even before the wedding!

1. Combining and Optimizing Insurances
Job One for any “financial marriage” is for both of you to change your insurance coverage. If both spouses have insurance coverage, it’s best to examine the different plans and costs to decide where the combination should occur. For instance, if the husband has insurance coverage that allows for free spousal coverage, you can set the wife up under that policy and start cutting your spending immediately.

If you can duplicate coverage, that’s good! Duplication ensures that should a medical emergency occur, your insurance policies should cover all of the important issues. If you are paying for insurance under one policy, but not the other, it may be a good idea to place the insurance coverage under the free policy and eliminate the charged one, if possible. Look for ways to lower your overall costs without losing coverage for both.
Mint’s Tip: A popular comparison site for health insurance is They list many of the major insurers, and don’t require you to input your personal information before seeing the plan specifics such as monthly premium, deductible, and coinsurance percentage.
Aside from just medical insurance coverage, you’ll also need to combine homeowners insurance, renters insurance, auto insurance, and possibly life insurance. Make sure that you aren’t paying for the same coverage twice, and combine everything when and where possible. Your overall costs are cheaper when combined – for instance, auto insurance policies always offer multiple-driver and multiple-car discounts. Since most policies will require you to complete these changes within 30 days of your marriage, it’s a quick way to see financial savings immediately.

Keep in mind, as well, that your insurance coverage policies need verification of the marriage in order to proceed. Don’t just wait around and count on filing the marriage certificate paperwork to get that document in time! Most offices take 4-6 weeks to process your certificate. Make it a point to go down to your local county recorder’s office and get a copy, so that you can set up your policies quickly and efficiently.

While you’re changing your insurance coverage policies, you’ll also need to change your beneficiaries should something go wrong. Most people allow their spouse to be their beneficiary for all bank accounts, savings accounts, retirement plans, and insurance policies – so you’ll have to make those decision, as well. Also, some employers require that you identify the person who would receive your final check should something happen to you. Make sure to identify that person as your spouse, as well.

2. Juggling the Tiny Details and Plan for the Unexpected
There are also other issues that should be addressed before you race off to the honeymoon. If one spouse will be changing his or her name, for example, that change should be filed with the social security administration. That spouse will be issued a new social security card and, with that information, can change driver’s licenses or IDs to reflect the change. Anyone who sends you mail – such as credit card companies, magazine companies, and even, where applicable, your alumni association – should be alerted, too.

Now that that’s all taken care of, you’ll need to upgrade your wills next. This step is particularly important, as an old will can cause a terrible knot of problems should something happen to you or your spouse. Don’t stall from addressing these concerns quickly – although planning for situations like these can be difficult, ignoring them will only compound the problem. Make sure your desires are made clear.

3. Figure Out Where You Both Stand Financially
Your next obvious step is one that’s hard to overlook: reviewing all credit cards and other debt obligations between you and your spouse. Many people have credit cards, while others have student loans, child support, and alimony. It’s a good idea to sit down and plan out a way that you and your spouse can pay off these debts. While a perfect solution would be to eliminate your debt prior to getting married so as not to burden your spouse with your own debt, this isn’t always a possibility. Therefore, it’s important for both parties to work on making their family and their marriage debt-free.

4. Budget Management For Your Future – Together
Beyond just paying off debts, though, you’ll want to review your financial goals for life. When do you both plan to retire? Do you own a home yet? If so, do you want to plan on moving into a larger home? If you don’t own a home yet, you’ll often want to draw up a timeline goal for buying one. How long will it take you to save up money for a down payment, and what can the two of you afford when it comes to a home purchase? Set goals together, as a couple, so that you both have a clear understanding of your desires, your goals, your milestones, and the means by which to accomplish them.
This last step brings us to a key point: a newlywed couple absolutely must develop a budget. It is essential that the two of you work out your income, your monthly expenses, and debt obligations. Once that’s been determined, you can make key decisions on how to save money, create an emergency fund, or invest in options for the future. Without a budget, you are going to experience a difficult time together!

With this budget in hand and your plan for the future set, your debt repayment plans laid out, and your key financial information changed over, as a couple you’re ready for a successfully and financially responsible marriage together. Stress levels will be lower and your foundation will be set for a strong marriage based on financial responsibility. Hopefully, all of this planning will ensure that money will never be what comes between you both!