Are you fully aware of the financial benefits of marriage? And if you are, do you know how to take full advantage of those benefits?
Flowers are blooming, birds are chirping, and love is in the air, which means spring—and prime wedding season—is upon us. Couples are not only planning their weddings but are also looking ahead toward the rest of their lives together—including the potential financial perks to getting married.
There’s a lot that goes into planning a wedding. A venue needs to be found, cake and flowers have to be ordered, and then, of course, there’s the dress, not to mention all of the other details that will need to be worked out. But along with all of the fun that comes with planning a wedding comes important decisions that can leave an impact on a couple for years to come. Case and point: the wedding budget.
According to The Knot’s 2016 Real Weddings Study, the overall cost of a wedding averages $35,329. Of course, that’s not to say that a couple can’t have a fabulous wedding while spending significantly less, but it highlights the fact that budget needs to be part of the conversation.
As your wedding budget takes shape, it’s important to be realistic. Funding an extravagant, $40,000 affair in six months might not be feasible. But planning a smaller event over the course of a year is a different story entirely. Whatever your budget, take the time to prioritize. If you have one or two items you really want to splurge on (say, an amazing photographer), find other categories where you can cut back, like offering only beer and wine instead of a full open bar.
The great thing about wedding planning is that it’s all about you and your significant other. There’s no right or wrong way to throw a wedding, so come up with a budget you’re comfortable with and find the things that will make the day special and memorable for the two of you.
It’s also important to remember that the wedding is one event that begins the rest of your life together. Your life will really be built after the honeymoon. For this reason, it’s worthwhile to take the time to talk about your bigger financial picture and goals openly before your big day.
Take advantage of the opportunity to discuss and set concrete financial goals that will provide you with confidence and a solid foundation for your financial future. Schedule a complimentary goal planning session with a Financial Consultant from TD Ameritrade where you can set up an actionable plan for your financial future.
Have a conversation about where you want to be in the next five years and beyond to ensure you are both on the same page. Look at both short-term goals (buying a house) and long-term goals (college funds for future children and retirement dreams). And then discuss what types of investment strategies may help make all of that possible.
Also, make sure you discuss any outstanding debt and form a plan to pay it off. Talk honestly about spending habits and what you expect from each other. Combining finances can be a tricky road to navigate if you jump in blindly.
Although some of these things may feel like a lifetime away, you can’t start planning for your future too soon. Before you know it, you'll be celebrating some milestone anniversary, talking about how much things have changed during your life together.
Aside from figuring out the best way to handle your finances moving forward, there can be financial perks to getting married. So what are the financial benefits of marriage besides a lifetime of pure wedded bliss (insert wink here)?
Once you're married, chances are you’ll be going from one household income to two, at least for the time being. And if you combine households after the wedding, you’ll typically only have one rent or mortgage payment to make, and the same is true for other household expenses.
There are also other, less well-known financial perks, too. For example, if you are both working full time, you can compare benefits from your respective jobs and pick the best from both packages. If one spouse isn’t offered health insurance through their employer or is self-employed and the other does have health insurance through their company, the cost of health insurance can decrease, as plans for one plus a spouse are generally cheaper than two individual plans. And if you are filing your taxes jointly instead of filing two separate returns, it can cost less to prepare your return.
Additionally, if one of you decides to stay home down the road, the working spouse may be able to contribute to a spousal IRA for the nonworking spouse.
It's important to understand the financial changes after marriage. This can help you and your partner work to create a solid financial future which will serve as a beneficial foundation for years to come. Just as in all aspects of marriage, working together on finances will be a learning experience, but staying the course can be essential to a well-planned future.
TD Ameritrade does not provide tax advice. Please consult with a qualified tax advisor with regard to your specific tax circumstances.
Visit TD Ameritrade to learn how a complimentary goal planning session can help you get a jump-start on planning for your future together.
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