Marrying Later – What it Means for Your Finances
By David Smyth
When my wife, Stephanie, and I got married, we were in our early 20s and things were pretty simple, financially speaking anyway. We didn’t really have any assets to speak of, or even real furniture! Student loans were, by percentage, smaller, and in those days people just getting married lived in inexpensive apartments because they had to save up for a home down payment. We also weren’t even thinking about purchasing a new car. That was a pipe-dream. But that was a different generation.
Today’s couples are often waiting until age 30-plus to walk down the aisle, which creates a very different financial picture. They’ve often already crossed the threshold of buying their first homes and cars, have established an emergency fund and are saving a bit for retirement through their employers’ company match. Most 30-somethings have gotten their credit card debt under control and are managing it well.
That all sounds great, but believe it or not, these days it’s not as simple as saying “I do” inside of a more established financial life than you had in your 20s. There are many more moving parts and pieces of the puzzle. One person may have more assets than the other, or more debt. One might want a pre-nup to protect family money or a business interest. Couples will need to determine whether or not to maintain separate bank accounts. Many choose to keep their own accounts, while adding a joint account for household expenses, but each couple is different.
Another major consideration for newlyweds is not just the merger of two financial households, but the merger of employee benefits as well. With all the changes happening due to Obamacare, etc., one of the most important things a financial planner can do is help couples make sure they fully understand and utilize their employee benefits.
Keep in mind also that tying the knot isn’t just about merging money and material possessions. There could be children involved, or legal considerations regarding in-laws or former spouses to discuss as well. So before you say your vows, be sure to have an open and honest dialog with your betrothed about these and any other financial considerations that may affect your marriage. Or, give us a call and we’ll help you take a look at your overall financial picture and avoid any surprises down the road.