June 8, 2006

Ten Tips for Merging Finances for Newly-weds

What a honeymoon! You had a wonderful time, spending money like movie stars and relaxing after the whirlwind of a wedding. But now the gifts are opened, the thank you notes are looming, you’re back at work and the bills are waiting.
So how do you and your spouse merge your finances and begin a life of married bliss?
According to a nationwide survey conducted by NFO Research, arguing with a spouse or partner about money is one of the top three things that worry Americans the most about their personal finances.
The same survey notes that couples would rather make whoopee than talk about financial planning (well, who wouldn’t?). That shouldn’t come as much of a surprise for newlyweds, but your finances (or lack thereof) still need to be addressed.
“Although it can be stressful, time consuming and a little overwhelming, merging finances doesn’t have to be a negative experience,” says Randy Schuldt, vice president of IHateFinancialPlanning.com, a Web site for the three out of four Americans who hate financial planning.
Schuldt offers the following tips for newlyweds hoping to live happily ever after:
Know where you are headed. Even before you walk down the aisle, we recommend that you and your soon-to-be spouse share the intimate details of your financial life. You may find that both of you hate financial planning, but that doesn’t mean that avoiding it together makes it any easier.
To change or not to change. Some couples stay with their given names, some women replace their middle name with their maiden name, some couples hyphenate and others create a completely new last name. It’s up to you. However, if you are going to change your name, take the time to update records, identification and other important documents.
Let the government in on your good news. If you change your name, you will also need to update your Social Security card, preferably before tax season comes around. Visit the Social Security Administration’s Web site at www.ssa.gov for more information, but be prepared to provide information documenting your new and old names. You’ll also need to take a trip to your Department of Motor Vehicles to update your driver’s license.
That little piece of paper. Don’t put that marriage certificate away in a special place where “you won’t forget it.” Chances are that your favorite financial representatives weren’t able to make it to your wedding, and, even if they did, they will need to see the certificate to confirm that you did indeed tie the knot if you want to change your accounts.
Consolidation may save you money.
You may find it easier to have separate rather than consolidated accounts because it’s easier to keep track of written checks, and you don’t have to share a physical checkbook. But you might incur more bank and check fees, so seriously consider merging your accounts instead. If you do consolidate, try using checkbooks that have duplicate records and leaving the check register in a central location. Then you and your spouse can record the checks, withdrawals and deposits in one place.
Make a date. Once you are married, you and spouse can still make dates with one another. Flirting during the date may take second fiddle while you discuss financial planning, but you will probably have more fun in the long run. Decide on a good time to discuss finances and then make it part of your married monthly routine. During your financial date, review bills, expenses, spending, saving or investing and income. These meetings are also a time to clear the air about any financial concerns you each may have and can easily lead to deeper discussions about career goals, division of responsibilities in the home and larger financial goals, so listen carefully.
Auto and health insurance could save you money. Marriage is a good reason to re-evaluate your auto and health insurance coverage. Review the types of insurance available to make sure you’re both covered. If you both have vehicles, you may be eligible for a multiple-vehicle discount if you get your policies from the same insurance provider. Just getting married may decrease your insurance premium, too. Check around for competitive quotes while you’re at it. If you’re both employed and receive medical benefits from your employers, you may want to consider whether it would be advantageous to consolidate under one plan or maintain your individual plans. Review your plan documents or talk to your benefits administrator to find out what options are available.
More insurance options for married folks. Although these topics are unpleasant to consider, you may also want to find out if your employer offers disability income insurance, a guarantee of income in the event of a disabling illness or accident, and life insurance. Life insurance is easiest to get (and most affordable) when you’re young and healthy, so don’t put it off until you’re older. If either of you have existing life and disability income insurance policies, change the beneficiary designation to include your spouse once you’re married.
Where there’s a will ... Now may be the first time in your life that you’ve ever needed a will. In the case of a married couple with no children, a quick trip to a lawyer can put your mind at ease that your assets will be divided the way you want should something happen to one or both of you.
Promises, promises, promises. You have promised to love one another until “death do you part.” Now make some additional promises to help you now and in the future. Promise to consult one another before making a major purchase. Set a price on what’s okay to purchase before a discussion needs to take place. Use credit responsibly — Debtors Anonymous is not looking for new members. And work together to build a financially stable future for you and any children you may be responsible for. Kids! Who can afford those critters? You can, if you plan.