Newlywed Smarts: Finances and Insurance, Explained
by Brittany Fisher of financiallywell.info
So you just got married — congratulations!
You’ve declared your love for each other and celebrated. Now comes the hard part: combining finances (or not!) and setting out on this life journey together. These are decisions you’ll have to make together — no one can force you and your partner to do anything, especially because this is your life and your partnership. But here are a few suggestions for how to navigate the upcoming financial discussions you’ll be having:
- Talk About Combining Finances This is the first step of any financial discussion after (or, better yet, before) marriage. Determine whether or not you want to combine bank accounts, list each other as users on your credit cards, and refinance vehicles (if applicable) to have each other’s names on the title. Some folks, however, decide to keep their finances separate. Around 30 percent of couples say they don’t know how much their partners earn — and they’re happy to keep it that way. Just make sure you are both in agreement here.
- Insurance Situations Regardless of whether you combine bank accounts, you should discuss combining auto and home insurance policies. Often, a multi-person or multi-car policy is more cost-effective than going alone, especially if you both have good driving records and no points on your licenses. You should also consider setting each other as beneficiaries on your life insurance policies.
- Buy a Home Together Buying a home is a great way to combine assets and increase your credit score, and with two people working toward making payments, it could be an achievable goal. When purchasing a home, you need to consider how much you are willing to put toward the down payment. Depending on what kind of loan you get, the percentage of the full mortgage you put down could be anywhere from 3.5 percent to 20 percent. If you put less than 20 percent down, you will need to get mortgage insurance, so be prepared to pay that fee.
- Get power of Attorney for Each Other Power of attorney can make it easier to deal with each other’s financial situations if necessary. The law affords spouses some built-in privileges when it comes to health care and insurance, but if one of you ends up not being able to take care of your own finances, power of attorney makes that situation less of a headache.
- Consider Filing a Will Having a will on file isn’t necessarily a fun thing to think about. After all, it can be sobering to consider your own mortality. But if the unthinkable happens and one of you passes away, you’re going to be thankful for having a will on file. For instance, any property the deceased person owns is given to the surviving spouse automatically — but what if you want your house to go to any children you have? What happens if both partners are unable to care for the home?
And finally, take a deep breath
These topics often seem stressful, as you’re making decisions that will impact the rest of your life (and your partner’s life!). Don’t forget to practice anxiety-reducing techniques or have a soothing cup of tea with your partner as you enjoy the first few months of wedded bliss.
If you want to talk to someone about these situations, or are having a hard time in general, get in touch with the folks at Petrichor Counseling. We can help you navigate these new beginnings and heal constructively.
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Photo Credit found on Pixels.com: Featured Image @RODNAE