4 Financial Decisions to Make When You’re Getting Married
Getting married comes with a whole host of financial decisions, including finding the best term life insurance quotes for yourself and your spouse
The period of time right before you tie the knot is one of the most exciting and overwhelming phases of your life. The excitement is palpable in the air—and so is the weight of the tasks that need to be accomplished before the big day. Beyond the ceremonial decisions like finding the right dress, tuxedo, venue, and finalizing a guest list, couples who are about to get married need to make some very important financial decisions as well. In all of the wedding planning, it can be easy to forget about all of the financial aspects that bind you and your spouse together. Today we’ll be looking at 4 of the most important decisions you need to make before you meet your spouse at the altar. We’ll be discussing everything from how to get life insurance that works for you to how to create a joint budget for you and your partner. If you are curious about the essential decisions you need to make before the big day, keep reading!
Exploring Different Insurance Options
Before you get married, you should investigate both health insurance options and term life insurance quotes
Don’t forget to secure term life insurance for yourself before getting married.
Before you are legally married, your health insurance policy—if you have one—is separate from your spouse. After you are married, you become eligible to be on one health insurance policy. This often helps married couples save money on healthcare, as the spouse with better coverage will be able to secure the same coverage for their partner. Though having both spouses on one health insurance plan is usually a money saver, it is recommended that you talk to your employer and insurance company to determine the best way to secure health insurance for yourself and your spouse.
Once you have established how you want to approach finding health insurance, the next type of insurance you want to discuss is life insurance. Most soon-to-be newlyweds should start by searching for term life insurance quotes. This is especially true for couples who want to take on a mortgage or have a child. As a general rule for all term life insurance quotes, the younger you get life insurance the cheaper your monthly premiums will be. The cost of your monthly premium will vary based on a number of different factors, but age and health status are the most important to insurance providers.
People who are about to get married also need to determine how much life insurance they need, which can get a bit tricky. There is no surefire method for calculating the correct amount of life insurance that couples should purchase. However, there are a few important things you want to keep in mind while calculating your life insurance needs. A good place to start is by multiplying your yearly income by the number of years your spouse will need support in the event of your untimely death. As a general rule, you should factor in having coverage for your spouse for at least 10 years. Once you have calculated your income times 10, add any outstanding debts you have including current home and car payments. It is also a great idea to factor in the cost of childcare and secondary education if you plan on having children.
Building a Joint Budget for Yourself and Your Spouse
Before you get married, make sure you are on the same page when it comes to your current and future budget plans
Don’t put off creating a joint budget.
Creating a budget is not an easy task. Luckily, we’re here to help you get started. It can often be difficult for couples to talk about money and finances, so it is tempting to put off creating a budget until after you are married. However, it is important that you determine a budget leading up to your big day and make a plan for after you tie the knot.
The first thing you need to do is budget for the ceremony and the reception. While it may sound crass to talk so openly about the budget required for your wedding, it can help save you headaches and misunderstandings down the line.
Once you have properly financially prepared for your ceremony, the next step is to be completely transparent with your finances and begin budgeting for future plans. This step can be difficult for couples, but the more forthcoming you are with your financial past and goals for the future, the easier it will be to create a solid financial plan for your future. Here are a few things you should make sure you discuss with your partner before you get married:
- Outstanding student debt payments
- Outstanding car payments
- Joint or separate bank accounts
- Future investments including a home or having children
- Honeymoon costs
- Professional goals including starting a business or changing careers
While this is far from a comprehensive list, we hope that you can use some of these examples to get the pre-wedding financial conversation started. Once you have covered these topics with your future spouse, you’ll have a much better idea of how you need to budget in the near future.
Make a Decision on a Prenup
More couples than ever before are choosing to secure their individual finances with a prenup
Prenups are helpful for your financial future.
A prenup—short for a prenuptial agreement—is a legally binding document that is signed to protect the finances of both individuals in the event of divorce. While it is not the most romantic subject, it is very common for soon-to-be-married couples to sign a prenuptial agreement.
The reason that more people are signing prenups is due to the fact that people are getting married later in life than decades previous. For people getting married in their late 20s or early 30s, prenups are popular because the individuals have likely saved up a bit of money. Conversely, many of the same age have outstanding debts including student loans or car payments. No matter your personal situation, many lawyers agree that a prenup is a positive choice for a lot of couples.
It is important that you and your future spouse acquire separate lawyers to go over the prenuptial agreement so that everyone’s needs are weighted evenly in the agreement. If you both opt to get the same lawyer, it can further complicate the divorce process.
Establish a Will
Don’t procrastinate when it comes to writing your will
Many couples hire a lawyer to help finalize their wills.
Writing a will is a necessary—yet depressing—task that everyone must accomplish in order to properly distribute their assets after death. While this may not be on the top of your list for pre-wedding tasks, it is one of the most important things people need to do right before or right after getting married. If you have children or plan to have children in the near future, it is especially important to designate who will take care of the children in the event of you and your spouse’s passing. While it is definitely a difficult subject to approach, it is necessary to plan for your spouse's future and your children’s future. Your will also affects your other family members as you will need to establish an executor to follow the specifications set forth in your will. Once your will is set up, you can rest assured that your spouse, children, and family members are well prepared in the event of the unthinkable.
Getting married is a huge decision, but there are even more big decisions you need to make in the lead-up. By taking the time to have uncomfortable conversations, you set yourself up for future success both financially and in your marriage. Keep these 4 decisions in mind as your wedding date approaches and you can tie the knot knowing your future is secure.