I am often asked, “Who is your perfect client?” People are puzzled when I say: “Whenever I can get a husband and wife to sit down with me to discuss their future.”
If you just got married, you’ve probably spent over a year planning for one day of your life. Now you have to ask yourself, “What comes next?”
A survey by the Knot found that the top priority for 55 percent of couples one year after their wedding is combining finances. Yet most newlyweds who just proclaimed their vows, “for richer, for poorer,” set out on their new financial lives together … alone. Each partner’s relationship with money has been ingrained into his or her thinking from childhood.
That’s not a problem if you are Prince Harry or Meghan Markle. But for most of us melding our financial perspective into a new joint belief requires dedicated and honest communication.
Taking the time to discuss your financial future with your spouse is invaluable. Why? Unfortunately, money is the number-one cause of stress in relationships, and financial arguments are the number-one predictor of divorce. To ensure that finances don’t doom your relationship from the start, the following are concrete steps and helpful hints to take in your first 90 days together to ensure that your marriage starts off on the right foot.
- Calculate your tax liability prior to changing your withholding at work. A common mistake is that couples change their designation from single to married and at the end of the year find a big tax surprise. Climbing out of it can take years.
- Link all your combined accounts to a personal financial website such as Mint.com to get all your financial data in the open — good and bad.
- Update your names on all your accounts, including Social Security, passports and driver’s licenses.
- Change the beneficiaries on all your retirement accounts, life insurance contracts and financial accounts to Joint Tenants with Right of Survivorship or set up Totten trusts.
- Carefully choose health insurance to avoid duplication and wasting money.
- Discuss and prioritize your personal and professional goals, such as buying a house, saving for future children, travel and new business opportunities.
- Practice what you preach. It’s a fallacy that two can live as cheaply as one, so try living on one salary and saving the other and see how much of that statement is true.
- Consider the 50-30-20 budget: 50-percent needs, 30-percent wants and 20-percent financial goals/savings. It’s super simple and broad enough to not make budgeting a chore.
Now that you’ve stopped paying your wedding planner, hire a Certified Financial Planner and begin planning the rest of your lives.
The goal in marriage is not to think alike, but to think together. A great marriage is not just when the perfect couple comes together, it’s also when an imperfect couple can learn to enjoy their differences. Congratulations and dream big.
Author of “Take Back Your Money” and “The Ten Truths of Wealth Creation,” John E. Girouard is a registered principal of Cambridge Investment Research and an investment advisor representative of Capital Investment Advisors in Georgetown.