Valentine’s Day remains a very popular time for marriage proposals but have you created a financial plan for your possible new life together? It’s time to take the next step and prepare for a blissful marriage!
“It is so important that couples planning marriage reach an agreement about how they intend to merge their finances,” said David Presson, Director of Investment Services at First Bank. “Financial planning prior to the wedding helps alleviate potential stress and conflicts.”
And, according to recent studies, financial problems are frequently cited as a major reason for divorce. First Bank offers these tips to couples planning a wedding:
Plan for Planning
- Share your personal financial situation with each other to eliminate unwanted surprises later. Outline your financial goals as a couple, including debt repayment, retirement planning, home purchase, vacations, etc.
- Set a time each month to talk about income, bills, investments, etc. to ensure that financial discussions become routine and both spouses stay involved. Assign financial tasks according to each person’s strengths.
- Consider merging accounts to save on fees rather than keeping separate accounts.
- Decide on a spending limit before discussing purchases.
Prepare a Family Budget
- Estimate your joint income. You may need to adjust your W-4 forms with your employers to provide adequate withholdings for income taxes.
- Estimate your monthly expenses, including any debt repayment you may have. Hopefully you will have enough disposable income to “pay yourself first” by maximizing pre-tax retirement contributions.
- Depending on your income and age, you may want to seek tax advice about the benefits of Roth IRAs. After this, talk about how to save for an emergency fund, investments, home, vacations, etc.
- Research your health and automobile insurance coverage to avoid overlaps or gaps. It may be cheaper to be covered on one policy.
- Check to be sure you are only carrying one renter’s or homeowner’s policy that is adequate to protect your combined household goods, including coverage for jewelry, computers, etc.
- Consider purchasing disability insurance to protect your income stream in case of disability and life insurance to provide security for your spouse upon your death.
Draft an Estate Plan
- Make an appointment with a local attorney who specializes in estate planning to put documents in place and to protect yourself and your spouse.
- Consider a will or trust, depending on your particular situation. Be sure you also have durable powers of attorney and health care directives.
Make Name and Beneficiary Designation Changes
- If you are changing your name, be sure to update your social security card, driver’s license, other IDs, records and important documents.
- Review the beneficiary designations on all IRAs, pension accounts, bank and investment accounts, as well as disability and life insurance policies.
First Bank firstbanks.com is one of the largest privately owned banks in the country with $6.23 billion in assets and 130 locations in Missouri, Illinois, Florida, and California.