Embarking on a new chapter of life as newlyweds can be thrilling and joyous. This is also a time full of change – from moving in together to possible name changes, there’s so much to do. But in the midst of the excitement, it’s important to consider some key financial decisions and goals. With so much going on, it’s easy for financial tasks to take a backseat – but making decisions related to filing taxes, insurance, and savings accounts early on can save a lot of time later. Here are four essential steps to take care of after marriage:
Determine your tax plan
Married couples may either continue to file taxes individually as they did prior to the wedding, or they may opt to file taxes jointly. Filing jointly can have many advantages, including qualifying for larger deductions and access to more tax credits. However, tax filing is not one-size-fits-all, so it may be best to consult a tax professional to help you determine the best way forward. It’s important for couples to talk about taxes and finances early, as this can help prevent confusion and may even save money. For instance, if you wait until April to start doing your taxes, you may rush to file jointly only to realize that you could have gotten a bigger refund by filing separately.
Re-evaluate insurance options
Those who have life insurance may want to make their spouse a beneficiary. Others may want to consider getting life insurance because their spouse may now depend fully or partially on a combined income. Couples may want to examine their other insurance policies. For example, spouses who had individually insured their own vehicles may want to consolidate both vehicles under one insurance provider to save money.
Marriage provides an opportunity to take a second look at health insurance options – it’s a qualifying life event that allows you to make changes to your plan outside of open enrollment. If both partners have coverage, it may be worth considering which spouse has the better plan.
Decide how to approach finances
When it comes to combining your finances, there is no one-size-fits-all solution. Couples will want to decide whether to combine their savings or maintain separate savings and checking accounts. Joint accounts may feel like an obvious choice to some while separate finances could be better for others. For those maintaining separate finances, household expenditures such as rent, groceries, and utility bills will need to be divided so that each partner understands their financial responsibility. On the other hand, couples with joint accounts will need to have discussions about credit card use, existing debts, and shared investments.
Inform the relevant authorities in case of a name change
If one or both spouses are changing their name, then they will need to ensure that their identifying documents are updated properly. Names will need to be updated with the Social Security Administration and any driver’s licenses and passports will require an update too. Apart from this, your school, employer, creditors, utility providers, doctor, insurance company, and local post office will need to be notified of your name change. Usually, you will need to provide a certified copy of your marriage certificate.
Along with these steps, many other small and large details will continue to crop up – drafting a will, making retirement plans, and making decisions about travel, savings, and much more. Proactively having discussions about these subjects and tackling them head-on can prevent stress and anxiety later on. The final step? Relax, take a step back and don’t forget to enjoy married life!