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Five financial tips for newlyweds

Set expectations from the start, make financial plans together, and check in regularly.

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When you say, “I do,” it’s for love—and for money matters too. When you get married, you tie a financial knot that you have to keep strong throughout your lives together. It’s a matter of setting money expectations from the start, making careful financial plans together, and checking in with each other regularly to keep your finances on track as things change.

“Don’t let disagreements about spending or different attitudes about money derail your newlywed bliss,” says John Sweeney, executive vice president of retirement and investing strategies at Fidelity. “Recognize that you are partners in financial planning, and take that partnership seriously.” 

Here are five ways to help successfully unite your financial lives.

1. Get organized.

If you didn’t talk seriously about how you’ll manage money together before you got married, now is the time to start. What you have, what you owe, what you spend, and how you feel about investing should all be part of the conversation. In other words, avoid financial secrets. Here are ways to do that.

  • Make a list of all income, assets, and debts—including credit cards and loans that you each bring into the marriage.
  • Decide how you will own assets—whether jointly or individually. Notes Sweeney, “Some couples prefer a ‘yours, mine, and ours’ arrangement, with a joint account for household bills and individual accounts for personal spending.”
  • Update your paperwork. If your marriage involves a name change, you’ll need to update your driver's license, passport, Social Security card, and credit cards. You will also need to name your spouse as beneficiary on certain investment accounts.
  • Decide how and what you might consolidate. From debts to investments, see whether it makes sense to simplify by combining some accounts. Many couples like the convenience of having their retirement savings, checking, and credit card accounts in one financial institution—and on one statement.
  • Plan your spending and saving together. Particularly if you have different ideas about how much you should spend, make agreements up front about day-to-day spending, as well as big-ticket item purchases.
  • Undo your debt. It’s common for one spouse to come into the marriage with more debt, or to differ on how much debt is OK. “Now is the time to meet in the middle,” says Sweeney. “Tackle your debt decisions together and pay off debts as soon as possible to free up more money to save for your future goals.”
  • Start a budget. While budgeting isn’t especially romantic, it can keep your marriage “in the black rather than red.” To get started on your budget, list all income sources, day-to-day expenses, and discretionary expenses. Squeeze some savings into your budget and set aside money for your emergency fund—three to six months’ worth of living expenses.

2. Set goals.

Because much of what couples do together comes down to dollars and cents, set some common goals, whether it’s buying a home, taking a yearly vacation, or planning for retirement. Work together to figure out what you can realistically afford. For example, try the Bankrate.com mortgage calculator to see what you might spend on a house.

Next, make disciplined saving a habit. Setting up automatic investments makes it easier to save and helps keep you on track. Schedule regular, automatic transfers from your bank account to your Fidelity accounts.

Finally, match your investments to your goals. For short-term goals, like a down payment on a house, you may want relatively stable investments, such as a money market fund, bond fund, or even CDs, as opposed to stock funds. For longer-term goals, like saving for retirement or college, you and your spouse should choose a proper mix (asset allocation) of stocks, bonds, and short-term investments based on your risk tolerance and time frame for investing. Though you both might come into the marriage with your own investments, be sure to review your overall portfolio together, to avoid overlap in your investing strategy. To check or set up a proper mix, try Portfolio Review.

3. Minimize taxes.

Once you’re married, you need to review your tax withholding and the ways you invest, to potentially help minimize taxes and maximize your retirement savings.

When your marital status changes, you must fill out a new Form W-4, Employee’s Withholding Allowance Certificate, with your correct marital status and number of W-2 withholding allowances. These determine the amount withheld from your wages for federal and state income taxes.

Tax-advantaged accounts like workplace savings plans, health savings accounts (HSAs), and IRAs can help you plan wisely for your long-term goals. Earnings in tax-deferred accounts can compound faster than those in taxable accounts because all your potential earnings remain in the account tax deferred—adding to your earning power until you withdraw them.

If each of you has a workplace savings plan like a 401(k) plan or 403(b) plan, contribute as much as you can—at least enough to earn any company-matching contributions. If only one of you—or neither—has a workplace plan, an IRA offers the same tax deferral, and you may be eligible to deduct your contributions from your tax return.

An HSA allows you to make pretax contributions that can be used for qualified medical expenses. Earnings and withdrawals are also federal tax free if used to pay for qualified medical expenses. You can also use the funds in an HSA to pay for both current and future qualified medical expenses.

4. Protect what matters most.

When you get married, you need to review, update, and in some cases purchase different types of insurance, including life insurance (to help protect your loved ones), health insurance, and disability insurance.

Some insurance coverage may be provided by your employer. But if you’re both working, says Sweeney, “review your current coverage to see where you can cut costs and avoid redundant coverage.” For example, it might be less expensive to be on your spouse’s health insurance than pay for your own.

Life insurance can help replace lost income and eliminate debts, which enables surviving family members to maintain their lifestyle. Life insurance proceeds are generally free from income taxes.Decide together whether you want to buy term or permanent insurance. Term life insurance, which is generally less expensive, provides coverage for a specified time period, and pays a benefit only if you die during that time period. Permanent life insurance (generally more expensive) remains in effect for as long as you live, and offers an investment component (cash value) that grows tax deferred. How much insurance do you need? Use our Term Insurance Needs Estimator.If you’re employed, you’ll also want to consider whether group life insurance offered by your employer is enough to cover your needs, or whether it makes sense to buy an individual policy as well.

Disability insurance usually covers a portion of your salary if you become disabled before retirement. Your employer may provide you with coverage, but make sure it’s enough to cover your expenses. If not, consider purchasing disability insurance on your own, since an unexpected event could prevent you from working and earning a paycheck for some time.

5. Create a will.

Your will is the most important legal document in your estate. It establishes your wishes with respect to the distribution of your estate and provides direction on how they should be carried out after your death. Even if you already have a will, you’ll have to update it when you get married. Dying intestate—or without a will—can wreak financial havoc on surviving family members. Estate laws vary from state to state, but in the absence of a will, surviving spouses without children typically retain only between a third and one-half of the deceased’s estate.3 You and your spouse should contact your attorney for more information and create wills as soon as possible. Be sure to review them every three to five years to make sure they address your changing circumstances.

Money discussions aren’t always easy for newlyweds. But, as with any marriage issue, it’s best to approach them with an open mind and as a team. The more thoughtfully you work together on money matters, the more financial harmony you’ll maintain in your life together.

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Before investing, consider the funds’ investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

1. Estate taxes may apply to insurance proceeds. Consult a financial or tax adviser 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.
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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.
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