Financial tips for newlyweds

Tuesday, June 21, 2011
By Julie Wiegan

Summer has officially begun, which means wedding season is here. Did you know that one of the biggest things couples fight about is money? Now that you’re finally hitched, avoid becoming one of those couples by laying it all out with your spouse. “It’s essential to address your financial landscape as a couple and open up the lines of communication when entering into a new life with another person,” says Danielle Prunier, Senior Vice President of Investments with Merrill Lynch Wealth Management in Los Angeles. Here are some of Prunier’s tips to help you start your financial future off right.

Honesty is the best policy
Be honest about your financial situation and history, including debt and assets. Consider the type and amount of debt being brought into the marriage and its implications. For example, is the debt related to financing a home, student loans, or from credit cards? A financial advisor can help determine the best strategies to plan for and pay off this debt moving forward.

Money management
Decide on whether or not you want to keep separate bank accounts, credit cards, and day-to-day spending. Some couples combine all their assets, while others create separate spending accounts and share a joint household account to pay bills. Do you want or need to tell your partner about the new purse or iPad you bought? Or are these items okay if set within a budget? There isn’t one right way, so figure out what works for the two of you.

Create a financial blueprint as a couple
Minimize the “financial strain” on your relationship by working with a financial advisor, who can evaluate your overall financial situation and helps put the pieces in place for tomorrow’s financial needs. This will incorporate your risk tolerance, asset allocation, concentration issues, fragmentation, and more. Be sure to come to the table with any upcoming goals and milestones in mind. Also keep in mind that 20 percent of your gross income should be saved before you take on other expenses.

Designate financial roles
It’s important that you both participate and understand how all aspects of the household finances work so that the other can take over in the event of an emergency.

Update important documents
Review insurance plans such as disability, life and healthcare insurance and work with your financial advisor and attorney to update any important documents for your future together, including wills, living trusts and beneficiary designations.

Hold a yearly savings summit
As your one-year anniversary approaches, invite your spouse to ‘date night’ to re-visit goals and priorities from career changes to home renovations. Use this time to also determine wants vs. needs. Do you really need a new cell phone or just want the latest model? Is a lavish summer vacation necessary or will a local trip do the trick? This is also a good time to re-examine automatic payments like gym memberships to determine if they are still worth the value.

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