A Financial To Do List for Newlyweds Many newlyweds these days are 30-something and are combining households and finances. Whether you're 19 or 90, there are a number of financial items that should be on any newlywed's To Do list after the excitement of the wedding dies down.
Change your beneficiaries--go through all of your investment accounts, savings accounts, 401(k) plans, IRAs, insurance policies (life, health, auto, homeowners) and other accounts and review your beneficiary designations if you want your new spouse to own these assets should something happen to you.
Review your insurance coverage--while you have those insurance policies out, review them for under-coverage, duplicate coverage, or lapses in coverage. If you've combined households, you'll be dropping one homeowners or renters insurance policy, but make sure that the remaining policy has enough coverage to protect your combined household goods, especially items that are typically limited, such as jewelry, computer equipment, collectibles, etc.
If both of you have health insurance coverage, review the plans closely to see if it makes more sense financially and from a benefits standpoint to cancel one of the plans or keep both. You typically have 30 days after your marriage to add your spouse as a dependent without providing evidence of insurability.
If your name changed, get a new Social Security card from the Social Security Administration (www.ssa.gov). Not only will you need this for ID purposes next time you change jobs, but it's important to notify the Social Security Administration of your name change so your retirement account is properly credited with your earnings.
If your name changed, you'll also want to get a new drivers license, which again, is often used for identification. Call your local Department of Motor Vehicles for details on how to go about doing this.
Make a will or update your existing will. Don't delay this important item.
Review your financial goals (retirement, reducing debt, buying a new home, etc.), and set new goals as a couple.
Review your credit card and other debts and develop a plan for paying them off. If you haven't already done it, now is the time to obtain copies of your personal credit reports and study them together. Contact Experian at (888)397-3742, Equifax at (800)685-1111, and TransUnion at (800)888-4213. Be prepared for some surprises, since many engaged couples don't reveal all of their financial situation to their fiancé.
Calculate your combined net worth. It's important to know where you stand financially as a couple. Use bank statements, investment statements, credit card statements and other documents to list your combined assets and your combined debts to obtain a "snapshot" of your financial situation.
Develop a budget. Calculate your combined income and subtract your combined monthly expenses and debt repayments. Hopefully you'll have something left over to build an emergency fund, add to your savings, or invest.
Decide on the mechanics for managing your financial affairs. Will you keep separate bank accounts and divvy up the bills that each of you will pay? Or will you put all your money in a joint account? Another option is to open a joint account that you each contribute to for household expenses but also maintain separate personal accounts, which gives each of you some spending freedom.
Decide which one of you will be responsible for paying the bills and taking care of other financial tasks. The best way to do this is by identifying each person's strengths and assigning tasks accordingly.
Best wishes. Here's hoping that money never comes between you!
Change your beneficiaries--go through all of your investment accounts, savings accounts, 401(k) plans, IRAs, insurance policies (life, health, auto, homeowners) and other accounts and review your beneficiary designations if you want your new spouse to own these assets should something happen to you.
Review your insurance coverage--while you have those insurance policies out, review them for under-coverage, duplicate coverage, or lapses in coverage. If you've combined households, you'll be dropping one homeowners or renters insurance policy, but make sure that the remaining policy has enough coverage to protect your combined household goods, especially items that are typically limited, such as jewelry, computer equipment, collectibles, etc.
If both of you have health insurance coverage, review the plans closely to see if it makes more sense financially and from a benefits standpoint to cancel one of the plans or keep both. You typically have 30 days after your marriage to add your spouse as a dependent without providing evidence of insurability.
If your name changed, get a new Social Security card from the Social Security Administration (www.ssa.gov). Not only will you need this for ID purposes next time you change jobs, but it's important to notify the Social Security Administration of your name change so your retirement account is properly credited with your earnings.
If your name changed, you'll also want to get a new drivers license, which again, is often used for identification. Call your local Department of Motor Vehicles for details on how to go about doing this.
Make a will or update your existing will. Don't delay this important item.
Review your financial goals (retirement, reducing debt, buying a new home, etc.), and set new goals as a couple.
Review your credit card and other debts and develop a plan for paying them off. If you haven't already done it, now is the time to obtain copies of your personal credit reports and study them together. Contact Experian at (888)397-3742, Equifax at (800)685-1111, and TransUnion at (800)888-4213. Be prepared for some surprises, since many engaged couples don't reveal all of their financial situation to their fiancé.
Calculate your combined net worth. It's important to know where you stand financially as a couple. Use bank statements, investment statements, credit card statements and other documents to list your combined assets and your combined debts to obtain a "snapshot" of your financial situation.
Develop a budget. Calculate your combined income and subtract your combined monthly expenses and debt repayments. Hopefully you'll have something left over to build an emergency fund, add to your savings, or invest.
Decide on the mechanics for managing your financial affairs. Will you keep separate bank accounts and divvy up the bills that each of you will pay? Or will you put all your money in a joint account? Another option is to open a joint account that you each contribute to for household expenses but also maintain separate personal accounts, which gives each of you some spending freedom.
Decide which one of you will be responsible for paying the bills and taking care of other financial tasks. The best way to do this is by identifying each person's strengths and assigning tasks accordingly.
Best wishes. Here's hoping that money never comes between you!
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