7 financial tips for newlyweds
- May 8, 2023
- 4 min read
What we'll cover
Financial concepts to discuss with your new spouse
Setting goals and creating a budget
Planning for the future
As a newlywed, you've begun an exciting adventure. However, even during the honeymoon stage, there are topics you need to talk about together. You might also learn something new, so go ahead and have a few "get to know you" sessions with your spouse.
We'll walk through newlywed finances to talk about, maybe on a date night or a weekly “marriage meeting.” Remember, financial conversations don't have to be boring. They can help you get exactly what you want out of your life together.
1. Set goals together
One of the things you can do to get on the same page with your partner is to set financial goals together. Many people find serious points of contention when discussing money. Your goals should be agreed upon, whether they consist of planning for vacations , emergencies or career transitions. Communicate your goals and put a priority on them, schedule progress check-ins (consider using a recurring shared calendar invite and decide a way to discuss goals).
Keep timing in mind as well — it’s important to look ahead at long-term objectives, such as retirement, in addition to any shorter-term items. Consider what you want your retirement to look like and set your goals from there.
2. Create a budget
Budgeting for newlyweds offers a great opportunity to get your financial ducks in a row. Figure out your individual as well as joint expenses and what to allow for on a monthly and yearly basis. One thing many people forget in budgets is a biggie: saving. We’d recommend trying to save a sizable chunk of your annual income — around 15% to 20% is a good place to start. Then, calculate your expenses and monthly budget using the remainder. Take a look at our budget templates for couples for ideas.
Tip: Once you have an understanding of your expenses and budget, digital tools like buckets in Ally Bank's Interest Checking Account and Savings Account an offer a helpful digital view of your finances.
3. Consider opening a joint bank account
Is a joint account right for you? Discuss and decide whether or not you want to merge your individual accounts. This is often helpful when working toward big financial goals together, such as buying a home. However, if one person has a much lower credit score, keeping accounts separate might be wise. That way, the person with stronger credit can continue to maintain it and benefit the whole household.
4. Be honest about your debt
It's important to talk about debt with your spouse, so you have a clear understanding of each other's finances. It's a good idea to be as open as possible about the types of debt you have and how much you owe.
In some states, including Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin, newlyweds can adopt each other's debt as community property, which means that spouses are equally required to repay debt. Debt assumed during marriage is considered community property. Common-law states include any of the other states besides these listed above. Spouses can take on debt as individuals despite the fact that they're married.
Ultimately, honesty is best: The fact that you're still paying off loans should not come as a surprise to your partner.
5. DIscuss finances regularly
The more you talk about money, the easier the conversations may get. Talking about money can be difficult, but it gets easier the more you do it. If you're nervous about having financial conversations , consider livening them up with a date night or a walk on the beach. Try to have a designated financial "date" at least every month, so you can get comfortable talking about finances and building financial intimacy.
Talk about a wide number of topics, for instance, your values when it comes to money, how to spend and save your funds, household budgets, credit usage and future planning.
Also, continually discuss how you'll each handle finances. For example, you may want to work out a deal in which one person primarily pays the bills. However, just because one of you signs the checks doesn’t mean the other is not privy to any big decisions.
6. DIscuss life insurance
Life insurance protects your spouse if you were to pass away. As a contract between you and an insurance company, the insurance company will pay out a death benefit in the form of a lump sum to your beneficiaries once you die. Start a conversation about life insurance with your new spouse. The birth or adoption of a child, buying a new home and starting a business could also signal reasons to need life insurance.
The "death and dying" conversation can be a tough one, but it’s important to consider how you will provide for each other financially if one of your paychecks stops suddenly. Go over some frequently asked life insurance questions together to learn about the benefits and options available.
7. Plan for retirement
It's a good idea to have a conversation about your views on saving for retirement. Ask yourselves what you're looking forward to doing once you retire — and no, it's never too early to ask this question. Find out how much your spouse already has saved for retirement and discuss when you'd like to retire. Consider taking what you've already saved on an individual basis and putting together one plan.
Also discuss how you might want to grow your assets. How do you feel about risk ? One of you may be more comfortable with a conservative approach, while another might prefer a riskier approach to saving for retirement.
There can be a lot of financial advice for newlyweds out there, so don’t panic if you’re just starting out. Focus on getting your budget and goals in place as a starting point, and keep communication open as think through long-term goals. If you’re struggling, consider working with a financial advisor together to create a customized plan for your future.
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