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You walked down the aisle, danced the night away, and sealed it all with a kiss. Welcome to wedded bliss—and, oh yeah, reality. Now that you’ll be cohabitating, you and your new husband or wife will also be co-spending, co-saving, and co-life planning. It’s not exactly cake testing, but long-term planning for your future is critical and shouldn’t be left to the long term. Here’s are some key areas to discuss with your spouse.
This one probably seems most obvious. Long-term planning and retirement planning could be interchangeable to many. It’s true, though. Investing for your retirement is one of the first “money talks” you should have as a new couple. You probably already started planning for retirement as a single person, but retirement planning should be different for couples. Here are some things to consider:
- It’s not “your money” and “my money” anymore. Now it’s “our money.” It’s time to take a household view. Retirement saving won’t work if one spouse is conservative about saving and the other, well, isn’t. Coordinate efforts and figure out which investment options work best for “our money.”
- Consider individual health and life expectancy. Death is probably not one of the sexy conversations you were hoping to have with your new wife or husband—at least not so soon. The truth is, though, that it’s more likely than not that one of you will live longer than the other. If there’s a large age difference, you need to factor that into your retirement investment planning.
- Understand the differences in your financial knowledge. If your spouse isn’t great with finances or budgeting, feel free to talk about that openly. Denying the obvious and letting him or her handle certain investment planning tasks will only end up hurting you both. Be transparent if you’re the spouse who’s lacking—and never be ashamed to call in the experts.
Your estate is essentially all of your things of value—really everything. You had an estate as an individual and now you have one as a couple. There are a few things to take care of upfront:
- Draft or update your will. Most young people don’t enter a marriage with a will, but it’s important to prepare one once you’re a married couple. Wills force couples to address important decisions, including how assets should be distributed in the event of a death. If you’re really planning long-term, work with an attorney and make sure your will covers arrangements for your future children (and even your future pets).
- Re-title certain assets. If one or both people enter the marriage with items such as homes, cars, or other titled assets, talk about whether you want those items to be jointly owned. This is likely most important in the case of real estate.
- Prepare powers of attorneys and healthcare directives. Again, death isn’t fun to talk about, but we warned you that long-term planning isn’t exactly thrilling. An estate plan should include designated powers of attorneys and other healthcare directives. Basically, these forms say who acts on your behalf when you are unable to do so. The power of attorney says who makes the financial decisions and healthcare directives say who makes the medical decisions. Couples should also designate backups for both of these areas in the event their original choices are unable to act on their behalf.
If you and your new spouse have discussed children, paying for college may be in your future. When it comes to saving for large purchases or goals, investing is likely your best option. If you’re interested in starting a college fund, think about these things:
- Open a joint account. You may have already had a separate newlywed finance talk and decided to merge your finances. That’s great! Joint accounts come with a handful of advantages, namely simplifying finances and, potentially, higher interest rates. Generally, it’s better to have one big portfolio than two small ones.
- Use automatic contributions. Once you start your joint account, decide how much each of you will contribute individually month to month. Then, set up automatic contributions that align with those expectations so that you don’t forget.
- Consider how many kids you want. You might not have a set number but you probably know if you want to 1-2 or 3-5 kids. This general number will help you come up with at least an early-stages plan for saving.
Even if you received most or all of your wedding registry picks, you’re probably going to want to make some bigger ticket purchases as a couple down the road. Depending on your financial status, those purchases may require you to take out large loans. Typically, couples plan to purchase a new home or a family car. There are a few ways to prep for taking out big loans:
- Loans for cars. If you need additional financial support to purchase a new car, you’ll want to shop around and compare funding options online. As a couple, discuss how much you want to spend each month—factor in car payments, fuel, insurance, and maintenance. You can get personalized loan options based on your credit score and income to help you make the best decision. Most auto loans are for 5-6 years.
- Loans for homes. First, be realistic and think longterm. Where do you and your partner ideally hope to end up—the suburbs? The city? Be open and honest about any debt either of you have. Now that you’re married, one partner’s debt impacts both of you. Write a comprehensive savings plan. If you can save up and make a big down payment, you’ll be rewarded with smaller monthly mortgage payments and less interest. Once you have your plan, you can really start looking into your loan options—but saving on your own should come first.
You may be tempted to skip over life insurance “for now.” It might not seem immediately necessary, especially for younger, healthy couples trying to save for bigger plans. Life insurance, though, is not the long-term planning step to skip. It can replace income, eliminate debts, and much more for your remaining family members should the worst happen. There are a few ways to choose what life insurance policy is right for you:
- Calculate your costs. As a couple, you need to sit down and determine exactly how much life insurance coverage you’ll need and for how long. Think about things like college costs, debt, childcare, and if you want to leave any kind of financial cushion.
- Decide between term or life policies. Term insurance is cheaper but expires sooner. Whole is pricier but won’t lapse and can even gain interest. There are pros and cons to both and it might help to sit with a professional to figure out your best option.
- Choose separate or a joint policy. Similarly, you can make the decision to have two separate life insurance policies or come together under one joint policy. It’s more common for couples to go their separate ways (in this sense!), but joint comes with a number of benefits, as well. Again, talking to an expert may be the best bet.
Policygenius also offers a life insurance calculator to help couples find a coverage recommendation tailored to their specific needs.
Marriage is basically the start of a longterm plan that you set in motion as a couple a long time ago. It’s not always fun to think about the end of life or loans, but doing so upfront will help set you, your spouse, and your potential future family up for success.
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