Family Finance Support: Newlywed and Courageous Thinking Ahead
Many premarital counselors have an entire section of their counseling plan dedicated to talking about finances. Why? Because financial differences of opinion, as well as behaviors, are a leading cause of marital strife! If you aren't married yet, now is the perfect time to assess. Before the big day, sit down with your partner and talk through these 7 family finance supports you'll want to get started on.
Family Finance Support Series: Newlywed and Courageous Thinking Ahead [Part 1 of 3]
1. Family Finance Insurance Policies
Insurance policies often have limits as to when you can make changes—typically 30 days, but sometimes as little as two weeks. Make sure you go over your options beforehand, so you know which changes to make.
For assessing health insurance, these are the questions we like to start with:
Is it less expensive for one partner to move onto the other’s health insurance?
Are there any children that now need health coverage?
Which insurance plan has better coverage or which saves money for other goals?
Does one insurance plan have better parental leave coverage, in the event you wish to add children to your family?
While you will probably be combining things like homeowner’s or renter’s insurance naturally, another issue to consider is auto insurance. Will it save you money to combine policies? Many places offer multi-car discounts.
Life Insurance: If you and your spouse do not currently have life insurance policies, now is a great time to get them—especially if you have children! Life insurance is less expensive for you today than it will be tomorrow. The price goes up as you age and add health conditions to your resume. If you do have life insurance, make sure to update your beneficiary to your new spouse. A good place to start is to have enough life insurance to pay off all of your debt, plus one year's salary - per person. If you have kids or are planning on it, you may want to go higher than that.
2. Make a Will
No one wants to think about it but in case of death of one or both partners, it is important to have a will set up. (Again, having children makes this vitally important!) Putting a will in place will make things much easier if the worst happens. For some, you can take care of this on your own with some simple online software. However, for many who have more complicated estates, you'll want to meet with a professional for this family finance item.
The Credit Union Financial Network Wills & Trusts Document Preparation* team offers complimentary, no-obligation assessments1, give them a call at (888) 656-4415 or email them at WillsandTrusts@cufn.org to find out more.
3. Calculate Your Net Worth As A Couple
Although this isn't an absolute must-do before you tie the knot, it's a good idea. If you haven't already laid your entire financial story on the table, now is the time.
The clearer you are about where you stand with your family finances, the better off you will be long-term. A simple net worth calculation involves totaling all assets, (positive balances in all checking and savings accounts, including retirement, as well as the value of the things you own, (house, car, etc.) Then, you list outstanding debts, any payments owed to previous spouses (such as child support) or other liabilities. Subtract the second number from the first and you've got your net worth. Use this as a springboard to put together your financial goals and your budget plan.
4. Outline Your Family Finance Goals
Money means different things to different people: security, power, or perhaps the ability to travel, start a company, or buy fun things. Talking about and agreeing on your financial goals as a couple is extremely beneficial, as it can help reduce arguing and can get you and your partner on the same page.
5. Decide How To Manage Your Accounts
It is no longer assumed that all couples will have joint bank accounts. However, there are some benefits to having at least one joint account. Managing family finances and household expenses can be much easier with an account that both partners can access and contribute to. Having joint loan accounts also helps the partner with lower credit to build more quickly and efficiently.
6. Create a Budget Together
Even if you have separate accounts, using a free budgeting template and creating a joint household budget is essential to reaching your family finance goals (and maintaining peace!). Talk with your partner about your perspectives on setting up a savings plan, how to track spending and generally what financial health means to you! Even something like taking a vacation on a budget should be discussed with your partner. When you prioritize your joint financial goals in setting up your annual and monthly budgets, everyone will be happier.
7. Changing Your Name(s)
If one or both partners choose to change their name, it will be important to take steps to ensure your creditors, financial institutions, and other entities are aware of the name change. This process can take time, so don’t delay. It may be helpful to make a list of all places and documents that may require official name change information, such as:
• Social Security card
• Driver's license
• Vehicle registration, lease agreements and other documents
• Creditors (including any outstanding student loans)
• Financial institutions
• Voter registration
Generally, you'll have to start with a social security card edit, then move on to the driver's license. After that, those two documents will help you to make changes on everything else.
Wedded bliss will be even more sweet once you've set up your family finance support system. On to bigger and better things! Oh, and congratulations. 😘
1CUFN Wills & Trusts Document Preparation is a legal document preparation business entity, License #81937, certified through the Arizona Supreme Court. CUFN and its employees are not attorneys and cannot provide legal advice. For Arizona residents only.
Certified Legal Document Preparation Services are not insured by the NCUA and have No Credit Union guarantee.
This article is intended to be a general resource only and is not intended to be nor does it constitute legal advice. Any recommendations are based on opinion only. Rates, terms and conditions are subject to change and may vary based on creditworthiness, qualifications, and collateral conditions. All loans subject to approval.