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A financial checklist for newlyweds

Just married? These six financial steps will help you smoothly combine your fiscal lives.

1. Draft or update your wills. You probably don't want to leave everything to mom and dad now that you're married. Review them again when you have kids.

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2. Update your life insurance. This coverage is designed to replace income lost due to death, so make sure the benefits go to your new spouse who's now dependent upon your income. It's also a good time to make sure the coverage is sufficient for your new needs.

3. Revisit your retirement savings plans. If you have individual retirement accounts, update the beneficiary designations here, too.

Don't forget your workplace retirement plans. Does your employer match your contributions, but your spouse's company doesn't? You might want to maximize contributions to the matching plan to take advantage of what is basically free money, says Eric Tyson, author of "Personal Finance for Dummies."

Remember, however, that should you eventually split up, the spouse who didn't maximize company savings account options could be at a nest-egg disadvantage.

4. Examine your income tax withholdings. Are you splitting one income between two people or has your household income just taken a gigantic jump? Either situation could produce an unwanted tax surprise when you file your return if you're not having the appropriate amount of payroll tax withheld. Do some quick calculations and adjust your withholding.

5. Implement a savings strategy. Some couples like joint accounts; others prefer to have each partner salt away money separately. It doesn't matter. Just start saving. Ruth Hayden, author of "For Richer, Not Poorer: The Money Book for Couples," says that couples who get into the savings habit at the beginning of their relationships "will never regret it."

6. Use your annual tax return as a financial yardstick. "It's a fabulous measuring tool," says Hayden. "If young newlyweds do this, it will make them feel good and help them stay on track."

Dana Dratch is a freelance writer based in Atlanta

 
-- Posted: March 10, 2004
   

 

 
 

 

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