7 Financial Steps For Newlyweds

If you’re about to wed, now’s the time to discuss your finances in marriage. It’s among the most important conversations the two of you will have as you embark on your lifelong journey together.

“When it comes to money and marriage, you want to be sure that you create a financial game plan early,” says Robert Siuty, senior financial consultant at TD Ameritrade. Through an open and honest discussion about marriage and finances, you can align your goals and set priorities.

Be an Open Book with Money and Marriage

Transparency is essential for getting your financial life started off on the right foot. Talk to each other about how much money you make at your jobs and elsewhere, your debt or other obligations, and your financial aspirations. Another key topic is your spending and saving habits. Some of us are savers and some are spenders. When the two of you come to terms with your “money personalities,” creating and managing your financial plan may become easier.

If it turns out you have different money personalities, you might consider divvying up money management tasks based on each of your strengths. Perhaps the saver manages longer-term investments and the spender manages monthly bills. Most importantly, plan regular check-ins with one another to discuss progress toward your savings goal and to make decisions about large purchases and your investments. These types of decisions in money and marriage should be made jointly. 

Explore the Chapters of Your Newlywed Finances

After you’ve had the initial tell-all money talk and have discussed your money personalities, drill down to more specific topics. Consider the following ideas:

1. Discuss your goals. Write down your short-, intermediate-, and long-term goals and set a timetable for when you’d like to accomplish them, Siuty suggests. Discuss how much you have already saved for retirement and how you'll build your retirement savings together in marriage. Also cover priorities like saving for a down payment on a house, taking a vacation, or saving for a new car when you develop your newlywed finances.

2. Align your investments. “Have a conversation with your spouse around how much risk you’re both comfortable with and invest accordingly," Siuty said. Choose investments that support your short- and long-term goals based on your time frame, risk tolerance, and investment preferences. Consider a complimentary goal-planning session with a TD Ameritrade Financial Consultant to help you get started with an actionable plan for your future.

3. Create a budget. Establish a budget in your newlywed finances by determining what your combined assets, expenses, and debt are, and use this as a guide to decide how much can be allocated to spending and saving after all necessary expenses and loan payments are covered.

4. Set up accounts. It's important to decide whether you'll combine all or some of your accounts, or keep them separate. Discuss if and how you'll divide bill payments, living expenses, and entertainment costs. If you have children from a previous marriage, consider costs for their continued care and needs, as well as whether they’ll be managed from your individual or joint accounts.

5. Establish an emergency fund. You should also have an emergency fund for those unexpected expenses that may pop up from time to time. The general rule of thumb is to have enough cash in your emergency fund to cover three to six months of expenses.

6. Tackle debt. If either you or your spouse has outstanding student loans, an auto loan, or revolving credit, consider placing a priority on paying off the debt as quickly as possible to reduce interest payments and increase your ability to save for your future.

7. Put your savings on autopilot. Automatic deposits are an easy way for you to commit to saving toward your goals, such as a down payment for a new home, a dream vacation, or your long-terms goals like retirement. And remember to keep the conversation about money and marriage going after the wedding.

“Once you get your plan in place, it’s important to periodically sit down with your spouse to track your progress,” Siuty said. “Are you on schedule? And if not, what are some changes you can make to get back on track?” As you explore marriage and money, consider downloading our Postnuptial Financial To-Do List (see below) to help ensure you’re taking the proper financial steps at the beginning of your marriage. 

Finally, don’t get discouraged if you happen to fall short on some of your goals. Some progress is always better than no progress. Motivate each other and make saving in your newlywed finances fun. Perhaps reward yourselves when you reach a certain milestone.