Tying the financial knot

Take a look at our checklist for tips on how to merge your finances efficiently when you get married.

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THE BACKGROUND:

Last summer, my sister got married to her college sweetheart. After the wedding festivities were over, their two-week-long honeymoon to Bora Bora (!) came to an end, and they started to settle into married life, she began to jokingly tease my brother-in-law with the expression, “What’s yours is mine.” Sure, it had a nice little ring to it—especially when she used it as an occasional excuse to treat herself. But what she also learned was that a shared life also came with shared responsibilities—like bills, student loan payments, and credit card debt—that weren’t so glamorous.

If you’ve recently tied the knot, it might be time to get a grip on your own joint stash of cash. The Fidelity Viewpoints® article,  Five Financial Tips for Newlyweds, offers some insight.

THE BREAKDOWN:

Let’s face it, sitting down together and talking about your money isn't as romantic as a moonlit walk on the beach, but it’s absolutely essential to establishing financial harmony as a couple. Take some cues from the handy newlywed checklist below. Download it here, then print it out and hang it on your fridge. It can be an easy way to start on the right financial foot now that the wedding bells have stopped ringing.

STEP 1: Get organized.

Make a list of all the financial stuff you share.
We’re talking income, savings, and debt, including credit cards and loans.

Change your name, if needed.
That means your driver’s license, passport, Social Security card, credit cards—you name it.

Name your new spouse as a beneficiary on your investment accounts.
What’s mine is yours now, right?

Decide if it makes sense to combine your accounts.
Think retirement savings, credit card accounts, or checking accounts. It may be easier to manage if it’s all in one place.

Agree on a spending and saving plan.
The Fidelity® Cash Management Account can be a great way to manage day-to-day spending.

Tackle your debt — together.
The sooner you can pay off those student loans, the sooner you can start saving for an annual anniversary trip to Paris.

Create a budget.
Fidelity’s online budget tool can make it easier—and may even give you the ammunition you need to remind your new husband that, no, a boys' trip to Vegas is not in the cards this month.

STEP 2: Plan ahead.

Set some goals.
Thinking of buying a house (or a vacation home) someday? Try the mortgage calculator at Bankrate.com to see if you can realistically afford that ski house in the mountains.

Put more away.
If you have a Fidelity® account, you can schedule automatic transfers from your bank account with auto investing. It helps to make saving regularly a no brainer.

Take a look at your investments.
For shorter-term goals, like buying a house, you may want to look at fixed income investments, like money market or bond funds. For longer-term goals, like saving for retirement, think about choosing a mix of stocks, bonds, and other investments based on your risk tolerance and time frame. Planning & Guidance Center can help.

STEP 3. Minimize taxes.

Tax filing change.
You’re married now, which means you’ll have to fill out a new Form W-4, Employee’s Withholding Allowance Certificate. Be sure to update your marital status and the number of W-2 withholding allowances to ensure you’re paying the right amount in taxes.

Consider tax-advantaged accounts.
Workplace savings plans [like a 401(k) or 403(b)], and IRAs can help you save for longer-term goals. If you are eligible to open an HSA, these accounts offer triple-tax advantages. Contributions, earnings and withdrawals are tax free when used for qualified medical expenses. Any unused funds remain in the account for continued growth.

STEP 4. Protect what matters.

Review your health insurance options.

If you’re both working, figure out which of your employers offers the best insurance coverage. You may be able to cut costs by being on your spouse's plan versus paying for your own.

Consider life insurance. 1
Let’s face it, you don’t want your spouse to be stuck living on the streets if something happens to you, right?

You can use Fidelity’s Term Insurance Needs Estimator2 to figure out if term or permanent coverage is right for you.

Look into disability insurance.
Having disability insurance at work is a great start, but your employer’s coverage may not be enough to cover all your bills if you unexpectedly get injured or sick. You may want to buy an individual policy to increase your coverage, just in case.

STEP 5. Create a will.

Seriously.
Yes, I know it sounds morbid. But according to Fidelity, it’s the most important document in your estate. Consider meeting with an attorney right away, then updating your will every three to five years as your circumstances change.3

THE BOTTOM LINE:

Complete the checklist. And the next time someone asks you if you have a handle on your money, you can both say with total conviction, “We do.”

Take the next step

Download and complete our Newlywed Financial Checklist

Get started

Topics:
  • Getting Married
  • Living Together
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1. Estate taxes may apply to insurance proceeds. Consult a financial or tax advisor for your specific financial situation.
2. The results from the Estimator tool should be used only as a guide, not as a recommendation. There may be other factors that you’ll need to consider when ultimately deciding how much life insurance is appropriate. The Estimator’s results are hypothetical and are based on certain assumptions, which may differ significantly from your individual situation.
3. Marriage, Uniting Your Financial Lives, Planning and Guidance, page 15, Fidelity Investments.
Investing involves risk, including risk of loss.
Fidelity Insurance Specialists are licensed insurance agents.
Fidelity Investments Term Life Insurance (Policy Form Nos. FTL-96200 et al. and FTL-99200 et al.) is issued by Fidelity Investments Life Insurance Company and, in New York, Empire Fidelity Investments Term Life Insurance (Policy Form No. EFTL-99200) is issued by Empire Fidelity Investments Life Insurance Company®, New York, N.Y. Some insurance policies are issued by third-party carriers, which are not affiliated with any Fidelity Investments company. Fidelity Insurance Agency, Inc., is the distributor.
Proceeds from your term life insurance policy are not generally subject to income tax; the full face amount of your policy is paid directly to your beneficiaries. Consult a financial or tax advisor about your specific financial situation.
The Fidelity® Cash Management Account is a brokerage account designed to meet your cash management needs. It is not intended to serve as your main account for securities trading. Customers interested in securities trading should consider a Fidelity Account® brokerage account. You can also link these two accounts for seamless management of your finances.
The tax information and estate planning information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. Fidelity does not provide legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Guidance provided by Fidelity through the Planning & Guidance Center is educational in nature, is not individualized, and is not intended to serve as the primary basis for your investment or tax-planning decisions.
Fidelity Brokerage Services Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
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