Did you know that early fall is the most popular time of the year to get married? It’s true, which means that December isn’t just the season for holidays – it’s also the season for recently wedded couples to make sure they’ve ticked off everything on their newly married financial checklist.
Sure, chatting about taxes with your recently betrothed might not sound like the most romantic newlywed endeavor, but trust us: reviewing your financial situation as a couple and making certain that everything is in order will mean more financial security in the long run – and that means more money to spend on all those date nights, special dinners and romantic getaways.
The IRS has good tax tips for newlyweds online, but if you’re looking for a quick rundown on the newly married financial checklist, keep reading.
Report Name Changes
If either spouse has changed their name after getting married, be sure and report this to the Social Security Administration. This is key because if the name on your tax return doesn’t match what’s on file with the Administration, you could risk delays on receiving your tax refund. Luckily, it’s easy to check up and change your name if need be – visit SSA.gov to find out what name change forms you need and how to file these, or you can call 800-772-1213 to get more information.
Confirm Your Filing Status
If you were married before December 31, you’re eligible to file jointly for the entire tax year that’s just finished. At the same time, if you wish, you can choose to continue filing as individuals rather than as a married couple – but most newlyweds prefer to take advantage of the benefits available via joint tax filing. Earned income tax credits, dependent care credits and student loan interest deductions are just a few examples of the tax benefits available to married couples who file jointly. Then again, some couples may choose to file separately due to concerns around being responsible for one another’s tax or other creditor liabilities. Either way, speak with your spouse to confirm how you both are planning to file when tax season comes around.
Combine Bank Accounts – Or Don’t
Many couples fully combine their financial lives after getting married, but plenty of spouses also choose to keep things separate. No matter what choice you make, the most important step is having a conversation about it. Sharing a bank account can make it easier to split household costs and pay shared bills – as long as you’re in agreement about where the money in your shared account is coming from, and where it’s going. Maintaining a budgeting system, where each of you can agree on and see how much money is going in and out of the shared account, can be a helpful way to have openness and transparency around this.
Another option is to keep your individual bank accounts, while also opening a joint account for shared expenses like house payments, utility bills and kids’ or pets’ needs. If you’re saving for a vacation, holiday shopping or another specific expense, you might also open a single-purpose savings account to jointly work on getting closer to your savings goal.
Evaluate Insurance Options
Any time you experience a significant life change – whether that’s buying a house, getting a new job or having a baby – it’s always a good idea to take a look at how your insurance needs will change. Getting married usually means new personal and financial responsibilities, as well as benefits, which is why many people choose to purchase a life insurance policy once they get married. Life insurance can help protect you or your spouse if something should happen to the household’s primarily income earner; and it provides a safety net for your shared dependents. If you already have a life insurance policy, check in to see if you need to update your beneficiary list to include your new spouse.
Other types of insurance to check up on as newlyweds are home insurance, medical insurance and car insurance. Being married can make these insurance options more affordable, as one spouse might be able to join their partner’s plan as a dependent and sometimes, married couples can bundle their car insurance to save money on monthly bills. Of course, if you’re moving into a new home after marriage you’ll need the right home insurance policy, but renters insurance can also be a valuable investment; especially if your recent wedding gifts included any pricey furniture, electronics, or other important items of value.
Discuss Your Assets and Liabilities
As newlyweds, it’s important to have a clear understanding of what assets your partner has – as well as what debt they owe. This information can sometimes slip under the radar and then emerge all at once when an emergency financial situation arises. Get ahead of any potential issues by discussing everything thoroughly and openly. Talk about assets such as cars, property, inheritances and so on, so both partners understand the financial resources. While some people can feel nervous to share their debt information, this is very important to do. Talk to your partner about student loan debt, credit card debt and any other money owed, so that you can work out repayment plans as a team and there are no surprises in the future.