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Whether your clients themselves are saying “I do,” or your clients’ adult children are heading down the aisle, one of the best gifts you can give newlyweds of any age is a path toward financial wedded bliss.
As soon as you hear the good news, take the time to share some important tips to help them make smart decisions—from this day forward.
Offer to meet with the happy couple face to face to talk through each of these four tips, or send them in a note or an email with an offer to help in the future. That type of personal guidance may very well turn two people who are making a lifetime commitment to each other into your own clients for life.
1. Know (and stick to!) your wedding budget
The desire to plan the perfect wedding day can make it easy to get carried away when it comes to your budget. And while it may not be the most exciting topic associated with planning your big day, knowing—and sticking to—your budget is something you’ll be thankful for long after the party’s over.
Your budget will affect every choice associated with your wedding, and every choice you make will affect your budget. Because of that, it is important to talk about how much you can spend before you start making any formal arrangements. Once you know how much you have to work with, research the per-person price of weddings in your chosen location. Determining how many people you can afford to invite before you send that ‘save the date’ announcement can save hurt feelings later on if you need to downsize. After you’ve chosen your date and venue, selecting vendors will also be much easier with a firm budget in mind. Decide where you want to splurge, where you can skimp, and negotiate based on those numbers. By planning with close attention to your budget, not only will your guests remember a fabulous celebration for years to come, but you’ll also take your vows knowing you’re not walking down the aisle straight into debt.
2. Have “the money talk” before you tie the knot
An important part of planning for the start of your married life is planning your financial life together. Just like any other partnership, a successful marriage requires openness, trust, respect, and honesty. From a financial perspective, that means you both need to be well informed and in agreement about every aspect of your money.
Decide if you’re going to merge your finances, share some but not all of your assets, or keep your finances separate and share expenses. Regardless of how you decide to manage money within your home, you are financially tied from a legal perspective, so discuss any debts you may be bringing into the marriage, including student loans, credit card debt, car payments, mortgages, etc. If this is a second marriage, be sure you understand any spousal or child support requirements. As a married couple, even old debts are now joint debts, so be clear about how you’re going to handle them moving forward. And be honest about your financial habits—good and bad. If one of you is a saver and the other is a spender, you may be in for some surprises that could have a negative impact on your relationship. Last but not least, share your financial goals and create a plan to make those dreams a reality. Your financial advisor can help you create a plan and, most importantly, help you work together as partners to stay on track.
3. Get smart about taxes
Taxes are more complex as a couple, so it’s a good idea to talk to your CPA or financial advisor long before tax time. Start by adjusting the tax withholding from your individual paychecks. Next, explore how you will file your taxes so you can plan accordingly. If you’re a dual-income couple, you may find that your combined tax bill is larger than if you file individually. While changes to the standard deduction have eased the potential for a “marriage penalty,” if your combined income level pushes you into a higher tax bracket, you may need to take a different approach.
4. Understand your marriage rights and benefits
Getting married is more than just a personal commitment between you and your spouse. The moment you say, “I do,” your relationship gains a legal status that gives you a number of new rights and benefits—both legal and practical.
Once you’re officially married, be sure to update your beneficiary designations for all insurance policies, bank accounts, and retirement plans, as well as all emergency contact lists. Review and coordinate your workplace benefits, and ask your financial advisor to review your insurance policies to be sure your coverage is appropriate. Because you now have the ability to not only receive Social Security, Medicare, and disability benefits for each other, but also to make medical decisions if your spouse is unable, be sure you understand each other’s wishes. Even better, put those wishes in writing so there’s no doubt in your mind during a crisis. Now is also the time to update and/or create a will or a trust. These estate-planning documents are an important part of your fiscal responsibility to each other.
Getting married is a big step—and a big change. It means sharing your home, dreams, life, and financial responsibilities. No matter what your age or financial circumstances, including a financial advisor in your pre- and post-wedding preparations can help you to establish joint financial priorities, get on the same page with money matters, and ensure that your financial plan aligns with your new life as a couple.
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Disclosure:The information and opinions herein are for general information use only. The opinions reflect those of the writers but not necessarily those of New York Life Investment Management LLC (NYLIM). NYLIM does not guarantee their accuracy or completeness, nor does New York Life Investment Management LLC assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice and are not intended as an offer or solicitation with respect to the purchase or sale of any security or as personalized investment advice.