Financial Planning for Newlyweds: What You Need to Do

Have you just tied the knot? Starting a new life with your other half is an exciting time, but it also poses some new challenges that you need to learn how to adapt to, one of which includes financial planning. It's not the same as it was before; you've now got to consider a new person whenever you make a decision with your finances. Luckily, if you're on the same page, this won't be an issue, but there are some things that you'll need to iron out when you start off. In this article, we'll go through all the steps that go into financial planning for newlyweds and what you need to do so things begin on a high note.

Define Your Future Targets

Setting your financial goals from the outset with each other will help you get a better idea of what you both want for the future. Maybe it's saving for a child or a new house if you haven't got one; all these things cost money and will require hard work. It's okay to want to separate your couple's savings goals from your own personal goals, but these must be discussed so it doesn't cause any trouble down the line. Say you wanted a new van, but your wife wants to go on a trip to Vegas with her friends; these goals should be separated and achieved by yourselves without sacrificing the things you both want together.

Take out Some Valuable Insurance Policies

It's wise to take out some valuable insurance policies in case anything were ever to happen to either of you or something valuable that you own together. If you take out a life insurance policy, it will cover the other partner if you were to die over a certain amount of time. However, you may want to go for a life assurance option, which is a more advanced cover that will protect your other half financially for the lifetime of the person who's insured. Health insurance is also important in case either of you get sick or have to pay a visit to a hospital. There are many family policies out there that can cover you both, and if you have kids, you can also put them on the policy. For couples who own a home, a homeowner insurance policy is crucial and often a requirement if you take out a mortgage with a bank. It covers you financially in case any damage happens to your home; this is particularly useful in case a fire causes major damage. However, you don't need to have a homeowner if you don't have a mortgage.

Talk About Bank Accounts

Bank accounts can be a controversial topic in many marriages, but it doesn't have to be. Depending on the dynamic of your relationship, one or both of you may want to get a joint bank account together to track your spending. It's essential that you discuss whether a joint account will be suitable for your marriage. They can be great for paying the bills, but one of you may want to keep your own money where you only have access to it. Having a joint account between you and your own separate accounts is a happy medium; that way, you can pile your joint expenses and savings into one place while having some money to spend on what you want.

Consider Your Taxes

After you guys have had your big day, it's a good idea to take a look at your taxes to see if there are ways you can save more money since you've gotten married. In the USA, if you marry your partner, there are some extra things you need to do to see if either of you has any tax withholdings. These include submitting a new Form W-4, listing the amount of W-2 withholding allowances you have, and sending off an Employee's Withholding Allowance Certificate. Based on the outcomes, you may benefit more by directing your earnings into a tax-deferred account, where they tend to accumulate at a quicker rate than if you were to put them in a regular checking account.

Put a Retirement Plan Together

You're not going to be young forever, so you need to start planning for your retirement, even though it might seem so far away. Start by talking about what you aspire to do when you retire, of course, you won't have it all figured out, but it's good to have an idea. Then, look at how you can plan financially and determine whether you can take out a pension with your job or a 401 (k) in the USA so you know you'll be protected financially. Make sure you check your Social Security benefits; remember that since you're married now, you'll have more benefits than you did when you were single, and these can be moved on to your partner if you ever pass away.

Have an Emergency Fund

Nobody expects to fall on hard times, but it does happen to people with little to no notice, so being prepared will help you both deal with the situation. One of the ways you can do this is by building an emergency fund, which will give you some money to tackle the situation. Imagine one of you were to get injured and couldn't work for an extended period of time or lost your jobs unexpectedly, at least you know the emergency fund is always there if you need to dip into it.

Plan Together for the Future as Newlyweds!

After the dust has settled from your wedding day, reality will hit as a newly married couple, and you'll have to start planning for your future with your finances in mind. It can be hard to adapt at the beginning, but it's vital that you have an idea of how you're going to approach things financially, or it can end up difficult for you both in the future. These tips will help you and your partner organize your finances and hit your savings goals together.