Married with finances—here’s financial advice for the newlyweds

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The vows have been made. The cake has been consumed. The wedding gifts opened. Now’s the time to begin living a new married life with your spouse, and that means updating your finances to reflect your new status as a married couple. Here’s how to start.

Discuss what financial arrangement works best for you

Before you walked down the aisle, you should have at least broached your individual financial situations and expectations that come with marriage, but if not, you must get on that ASAP.

If you like your independence, you can keep all your financial accounts separate from your new spouse. If you prefer joint bank accounts, you can do that instead. A compromise would be to open one joint account to pay the mortgage or rent or other shared household expenses and keep the rest of the accounts separate.

Even if you prefer joining up, you may want to retain at least one personal account. “I always ask my married clients to continue maintaining separate financial accounts,” says John Pak, a certified financial planner at Otium Advisory Group in Los Angeles. “Commingled accounts can be tough to untangle… [and] just because you’re now married does not mean you suddenly forget about your personal spending needs, obligations, or goals.”

Be honest about your personal financial situation

This isn’t the time to hide any financial struggles or mistakes. If you haven’t already, get everything out in the open. That means sharing with your spouse the details about any credit card debt and student loan debt—if you have a lot, your spouse needs to know, as this could affect your future options when buying a home or financing a shared car. “Always better to come clean…earlier the better!” Pak says. That means you should swap credit scores and credit reports as a starting point.

You’ll also want to discuss both personal and joint financial goals. If you intend to buy a house or condo together, you’ll need considerable savings for the down payment, to which you’ll both likely need to pitch in. You’ll also need good credit to get approved for financing and land a low interest rate. If you or your spouse came into the marriage with banged-up credit, you’ll need to start making moves to improve and build credit history.

Talk over money attitudes

We first learn about dealing with money from our parents. Were yours savers with few financial worries, or did they live paycheck to paycheck? Each of these situations impacts your views about money. “Talk about how money influenced your family and what you saw growing up,” says Andy Tilp, founder of Trillium Valley Financial Planning in Sherwood, Oregon.“This will help the other person better understand.”

Also, talking openly about money issues can help prevent disagreements about money throughout the marriage. “Money is one of the top reasons for divorce. So if you want to increase the probability of having a long happy marriage, understanding each other's perspective about money should be on the top of the list,” says Alajahwon Ridgeway, owner of A.B. Ridgeway Wealth Management in Lafayette, Louisiana.

Consider a postnuptial agreement

If you realize you’re not quite on the same page financially, you can seek some legal protection for your personal finances. After you tie the knot, you can get a postnuptial agreement with your new spouse. “Postnuptial agreements are very similar to prenuptial agreements in that they usually set terms for how assets would be split in a divorce,” says Kaylin Dillon of Kaylin Dillon Financial Planning in Lawrence, Kansas. “The main difference being that the postnuptial agreement is signed after the couple is already married.“

But it’s not just about preparing for divorce, which no one wants to consider in the first days of wedded bliss. The idea of a postnuptial agreement is to make official all the ways you will share your money and what money you will keep separate throughout your marriage. This can give each spouse specific boundaries for what they can spend or save as they please versus what requires a conversation, which can be good for peace of mind but also smart if you have vastly different approaches to money.

Divvy up your wedding cash

OK, onto more fun stuff! In addition to gifts, you and your spouse may have received a large amount of checks and cash from your wedding guests. This is the perfect opportunity to start your co-finances on a good foot. How will you use this money? Work together to find common ground. Because it’s effectively bonus money (and not earned), it’s a positive conversation from which to learn financial compromise. “Maybe you will set it aside for your first-anniversary trip, or you may want to use it to pay down some of your debt,” says Tiffany Johnson, a certified financial planner at Piece of Wealth Planning in Atlanta, Georgia.

Create a new household budget

If you weren’t living together until marriage, you must now build a budget for your household, most likely with each spouse contributing to the household’s monthly expenses. “Attempt to keep your fixed expenses under 50% of your joint take-home pay,” Pak says. “Discuss who will pay what. It might not be an even split—one might take on a larger responsibility based on earning power and financial maturity.”

If a couple wishes, they can put down in writing how they plan to split the bills. That way, there’s something to refer to if a conflict comes up.

If you plan to change your name, do it ASAP

Did you decide to change your name when you got married? It may take some time to get your name changed legally, so get the ball rolling as soon as you can. You want all your financial accounts to be in your new name.

Get a copy of your marriage certificate and get started. Your first orders of business are to legally change your name on your Social Security card, driver’s license, and passport, and then move on to payroll, credit cards, and financial accounts. You may wish to keep your maiden name as your middle name, to avoid confusion or any doubt that you are who you say you are, for instance, in case you have a beneficiary claim later on that uses your birth name.

Update beneficiary information

Bring up-to-date your financial accounts including retirement accounts and life insurance accounts with the proper beneficiary designations. You may opt to make your spouse your beneficiary, but there’s nothing wrong with keeping a parent, sibling, or child as the beneficiary on a financial or insurance account. Decide which designation works best for your family.

And if you changed your name, talk to your parents or anyone else who may have listed you as their beneficiary and make sure they update those policies with your new legal name.

Examine your health insurance

One of the potential benefits of becoming legally betrothed is that you may be able to share employer-provided benefits—as in, your health insurance. Marriage is considered a “qualifying event” that allows you to revisit your elections, so review your health plan and your spouse’s health plan carefully. Does your spouse’s plan have much better coverage and/or rates? If so, getting added to that superior health plan may be the best move. Crunch the numbers, talk to HR, and decide if a change is warranted.

Combine other insurance accounts

Getting married is a good opportunity to combine other insurance policies as well. If you have individual car insurance or renters' insurance, you may try joining policies instead. “It will likely be cheaper for both you and your spouse to be on the same insurance policy, [and] this is certainly one thing that you will want to do as soon as possible,” Johnson says.

A quick phone call to your insurance agent is all it takes. “They will be able to provide an accurate quote for your policy with your spouse added,” Johnson says. “In addition, this is a great time to shop around with different insurance providers to see if they offer a better quote.”

Start planning financially for a family

If you plan to have children, it’s not too soon to make financial plans that take them into account. After all, the cost of raising a child is estimated at $233,610 until age 18, according to the U.S. Department of Agriculture. And this sobering statistic does not include the expense of a college education. Ready for a family? Better get started saving.

“When newlyweds are faced with preparing a budget to start a family, they can expect to spend anywhere between $5K to $20K and that's just year one,” Pak says.

Beyond diapers, pricey formula, what’s so expensive? Parents have to think about the cost of adding a child to their health insurance plans, daycare expenses, and setting up a 529 plan for the child to minimize student loan debt, plus new estate planning that includes the child. “The expenses start to rack up pretty fast,” Pak says.

Want to get a jump on saving for college with a 529 plan? Unfortunately, you’ll have to wait until the baby is born. “You need the child’s Social Security number to open a 529 plan,” Pak says. But that doesn’t mean you couldn’t start socking away a savings account to prepare for when you grow your family.

Save for a rainy day

As a newly married couple, you’ll want to build some emergency savings for your household. Financial planners recommend three to six months worth of living expenses in an emergency fund. If each spouse pitches in, that will be quite a savings cushion for your new household. Start building your nest egg now by making little changes, such as automatic deposits or transfers to a joint savings account. You may also talk to a financial advisor for more advice on your specific situation.

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