We already covered some of the basic tasks to handle after you get married, including changing your name, enrolling in jewelry insurance, changing your health care and signing up for life insurance in Part One of You’re Married, What’s Next? But now, we’d like to take things a step further and talk about more sensitive financial and legal matters.
#1. Create a Joint Bank Account and/or Joint Credit Account
For many couples, creating a joint checking account or joint credit card account serves as a symbolic gesture, showing the union of two people into partnership. Furthermore, if you’re planning on buying a house or another large purchase, having joint accounts can make things much easier, since you can pool your incomes and build credit faster. Having all of your money in one place can also make tracking expenses much simpler.
#2. Divide Your Monthly Expenses
Whether you’re planning on creating joint banking accounts or maintaining separate accounts, it’s important to come up with a fair and reasonable plan for paying monthly and annual expenses.
If you will have a shared central account, this is pretty straightforward, since you can simply use your pooled money as needed.
If you plan to maintain separate banking accounts, it would be helpful to divide up things like rent/mortgage, loans and other bills. If there is a large monthly expense in one person’s name, you may wish to set up an automatic monthly transfer to their account.
However you decide to share your expenses, make sure you are both clear about who is responsible for what.
#3. File Your Taxes
The IRS identifies you as married for the entire year if you tie the knot before December 31st. Now that you’re married, you have the option to file in a few different ways, including:
- married filing taxes separately
- married filing taxes jointly
The IRS acknowledges your marriage by providing a marriage penalty or bonus. A couple suffers a “marriage penalty” if its partners pay more income tax as a married couple than they would have as two single individuals. Conversely, the couple receives a “marriage bonus” if its partners pay less income tax as a married couple than they would have as two single individuals.
#4. Set Up Your Retirement Savings Accounts
If your employer offers 401k benefits, make sure to sign up. Try to select the highest percentage of matching that your employer offers. Signing up early on ensures that your money will start vesting and you will have more saved by the time you do retire. If your employer does not offer a retirement package, talk to a financial advisor to set up an independent account. There are also a wide range of free financial calculators online to help you calculate how much you should be contributing each month.
#5. Set Up a College Savings Account
If you plan to have children, setting up a savings account early can help ease the stress of tuition. A 529 plan is a type of investment account that allows you to save for future college expenses without paying taxes on the investments’ earnings once they’re in the account, or when you liquidate the funds. Keep in mind you can also (politely) ask family members to contribute to these funds.
#6. Draft Your Last Will and Testament
A last will and testament is a legal document that dictates what happens to you, your possessions and assets after you pass away. This document also outlines your wishes regarding medical care in the event you cannot communicate directly, due to severe injury or illness. In a living will, you can specify exactly what medical treatments you would accept or refuse in various circumstances. Though this is certainly not a “romantic” conversation, you need to have this discussion and prioritize making a will. It’s recommended that you meet with an attorney to help you write your will and ensure that the document meets state requirements. It’ll cost a little upfront, but will save time and reduce stress in the long run.
Lastly, regular discussions with your spouse about finances (or sensitive matters like your will) can help alleviate any stress that may arise. Setting up financial goals towards large expenses like a house or future vacations can help make this process easier and more fun. Most importantly, don’t forget to relax and enjoy this time together right after your wedding.