Financial Planning for Newlyweds (or Nearly-Weds)

Entering into a marriage is not just a romantic commitment but also a financial partnership. For newlyweds or nearly-weds, planning future finances together can help strengthen the relationship and work toward financial independence. Here’s a guide to tackling this often-sensitive subject.

Open conversations

Transparency is key to an independent future. Both partners should share their income details, assets, liabilities, and financial obligations. Discuss short-term and long-term financial goals, which might include:

• Saving for a vacation
• Buying a home
• Planning for a family
• Preparing for retirement

Being open about these matters will help to align financial dreams and expectations.

Prepare a joint budget

Track income and expenses to help understand each partner’s overall financial health. Consider lifestyle changes that could affect the monthly budget, such as moving to a new city or starting a family. The budget should reflect this and other factors, such as:

• Fixed expenses: Rent or mortgage, utilities, insurance, etc.
• Variable expenses: Groceries, entertainment, travel, etc.
• Savings: Emergency fund, retirement savings, other goals

Joint budgeting not only helps manage household expenses but also helps both partners understand they are on the same page about financial habits and future goals.

Managing debt

Coming into a marriage with debt, be it student loans, credit card debt, or personal loans, is common. It’s important to discuss how to tackle these debts openly. The couple may want to consider:

• Prioritizing high-interest debts
• Creating a repayment plan
• Considering debt consolidation or refinancing options

A debt management plan can help reduce financial stress and build a strong financial foundation.

The Household Emergency Fund

An emergency fund is an essential part of any financial plan. It provides a safety net in case of unforeseen events such as job loss, unexpected medical bills, or major repairs. Aim to save enough to cover 3-6 months of living expenses.

Planning for retirement

Start planning for retirement early, since the sooner one starts investing, the more time one’s money has to grow. Consider these retirement savings options:

• Employer-sponsored retirement plans like 401(k)s, 403(b)s and other plans
• Individual Retirement Accounts (IRAs and Roth IRAs)
• Pensions and Social Security benefits
• Annuities

Insurance planning

Insurance is an essential tool in protecting one’s financial health. Evaluate insurance needs and consider several types of insurance:

• Health insurance to cover medical expenses
• Life insurance to provide for each partner in case of untimely death
• Homeowner’s or renter’s insurance to protect property
• Auto insurance for vehicles

The type and amount of insurance needed will vary based on circumstances as a couple.

Regular financial check-ins

Lastly, regularly review and adjust the household financial plan to accommodate life changes and financial goals. Whether it’s an annual check-in or a quarterly review, keep the lines of communication open.

In Conclusion

Having a strategic financial plan sets the foundation for an independent financial future. It takes teamwork, commitment, and regular conversations to align financial goals as you work toward a future together. Whether you are newlyweds planning your life together or nearly-weds, the time to start financial planning is now.

5102595-0126a This material is intended for educational purposes only and should not be construed as specific insurance, investment, or legal advice. Financial planning and investing involve various risks, including the potential loss of principal. Past performance is no guarantee of future results. The information provided is general in nature and may not apply to your specific situation. Insurance coverage and availability are subject to eligibility requirements, underwriting approval, and the terms and conditions of the specific policy. Premiums, coverage limits, and exclusions vary by provider and state. The source(s) used to prepare this material is/are believed to be true, accurate and reliable, but is/are not guaranteed. Before you make any decisions regarding your personal financial situation, you should consult a financial or tax professional to discuss your individual circumstances and objectives.