Newlyweds: Follow These 5 Tips for Getting Off on the Right Financial Track
We have called on Beth D’Andrea more than once here at PW, because with her experience as a financial counselor (through her Malvern-based firm, Plumtree Financial Planning) who has done a ton of work with newlyweds, she knows a thing or two about what it takes for couples to begin, officially, a new financial life together.
And even though it’s not as fun for us all to talk about as what shade of hydrangea will make up your centerpieces, making sure you off on the right financial track together is a heck of a lot more important—so we asked Beth for her tips on how you can do just that. “So many couples spend hours and hours planning a spectacular wedding day, and we want to help them plan a fabulous life to follow,” she says. “Young couples getting married bring more to the union than couches and silverware—they bring bank accounts, savings and sometimes, even debt. Developing a strategy to merge their finances puts the couple in charge of their money (and their future) not the other way around.”
And so, here’s her cheat sheet: Use it to make sure that when you get back from the honeymoon, you’re not greeted by both a huge pile of thank-you notes that need to be written—and a scary mound of debt.
Do this before the wedding Open up a joint bank account so you can start depositing those wedding gifts, because it’s the best way to keep them safe. Many of the checks will be made out to both of you, some with the bride’s maiden name and some with her married name. Let the bank know your situation when you set up the bank account and you should be able to deposit all of these checks easily. If made out to both of you, you’ll both need to sign them to deposit them. If made out to both of you with the bride’s soon-to-be married name, simply sign once with your maiden name and then again with your married name to deposit.
Do this after the wedding Take some time together to think about your future and create a shared vision. Once you know what you’re working towards, it makes all your other money decisions easier (Like: Should we buy that big screen TV or put the money towards the down payment on a new house?) Now decide how to get there, and how much to save each month towards your goals. Remember: Your wedding didn’t plan itself—it was a bit of hard work and tough decisions—but it was beautiful because of the work you put in. The same is true for planning your future.
Do this with your wedding-gift money Of course, this is different for everyone, but there are some important things to cover: First, take five to 10 percent of it and have fun! That’s what your guests and family members intended. Then, take a large chunk and stash it in your joint account as emergency money. You’re surely living within your means, but, you never know when the fridge will break down or the car will breathe its last breath. Next, pay off any expensive credit card debt or lingering wedding expenses—don’t start your marriage under the weight of bad debt. Now, if you have money left, it’s time to invest in your future. Put the rest away for what you are both dreaming about—a new home, a great one-year anniversary vacation … Decide together, and you will surely reach your goals.
Use this technology to help you plan and budget There are a few online planning tools I think are great: Mint.com (free) helps with budgeting and seeing where your money is going, while sites like Betterment, WealthFront and Future Advisor will analyze your investment portfolio and make recommendations (for a relatively low fee). Of course, it’s always smart to go into these programs with your eyes open—your goals should be paramount and drive all saving and spending decisions.
Do this throughout your marriage Talk about money openly and often. Don’t keep secrets or hide debt or secret spending. Work together through money issues—because remember that everything you do now affects what will be there for you in the future. I like to think of newlyweds and soon-to-weds who really work together on their finances as power couples because they are creating their own future by taking control of their money. You are a team now, and everything you do—including all the financial decisions you make—should be for the team.
What tips or tricks have you and your soon-to-be or new spouse found to be particularly helpful on this front?
Getting married? Start and end your wedding planning journey with Philadelphia Weddings' guide to the best wedding vendors in the city.