How We See It

Charlotte Anderson

Charlotte Anderson

Posted:
July 20, 2012

After the Wedding and Honeymoon: Basic Financial Planning for Newlyweds
By: Charlotte Anderson, Financial Advisor, TBT Financial Services

The road between wedded bliss and financial harmony can be rough. But planning early for your financial future can thwart complications and disagreements later. 

Fundamentally, couples must decide whether to combine income, assets and/or debt. Establishing joint accounts for living expenses and savings can simplify finances, although many enjoy spending autonomy by keeping some money separate. Discussing debt can be dicey, but its management will be an essential part of overall planning.

Once accounts have been merged or established, budgeting takes priority. Reconciling spending, saving and investing habits early affords newlyweds more time and comfort in defining and achieving goals. Of course, all budgets require a gatekeeper - someone to pay the bills and oversee the checkbook. Often the choice is clear; one partner may be more detail-oriented than the other. Sometimes both partners are willing to share the burden. But whatever the choice, both spouses should review the budget together on a monthly basis to ensure goals are in check. 

Part of the budgeting process will include consideration of tax liability. Many married couples face a higher tax bill when filing jointly. Avoid surprises: compute taxes as single, as well as joint, to determine which method provides lower overall liability. It is always beneficial to consult a tax advisor, especially for those with more involved tax considerations. 

Another significant consideration for married couples is differing investment philosophies. Most have different attitudes and concerns about money and will, therefore, assert different risk tolerances. When harmony requires agreement on investment objectives and desired rate of return, compromise is key. Separating some assets - perhaps retirement savings - can reflect each partner's individual risk tolerance. 

In addition to company-sponsored retirement plans, take the time to balance other employee benefits. Health care is an excellent example. Maintaining separate "single" benefits may be more prudent than one spouse obtaining "family" benefits, but the possibilities are worth investigation. Always compare deductibles and co-payments. Estimating annual out-of-pocket expenses may produce surprising results. And consider the risk of unpleasant surprises - does either plan have a cap on those expenses? 

Communication is crucial to newlyweds. Financial planning at this stage begins with sharing fiscal histories, present circumstances and risk tolerances. But most important, couples should create a vision of their life together and discuss how they can use money to develop the shared vision. 

If you or someone you know needs financial planning assistance, please contact me today.

 

Material prepared by Raymond James for use by its financial advisors.

Securities offered through Raymond James Financial Services, Inc., Member FINRA/SIPC, and independent broker/dealer, and are not insured by bank insurance, the FDIC or any other government agency, are not deposits or obligations of the bank, are not guaranteed by the bank , and are not subject to risks, insuring possible loss of principal.  Raymond James is not affiliated with TBT or TBT Financial Services, Inc.

Raymond James financial advisors may only conduct business with residents of the state and/or jurisdictions for which they are properly registered.  Therefore, a response to a request for information may be delayed.  Please note that not all of the investments and services mentioned are available in every state.  Investors outside of the United States are subject to securities and tax regulations within their applicable jurisdictions that are not addressed on this site.  Contact your local Raymond James office for information and availability. 

 

 
 
 
 
 
 

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