5 Things-To-Do for the Newly Wed (or Cohabiting)
Posted by Gail | Filed under Getting Married?, Money Management
Summer is the hot season for tying the knot. After all the brouhaha has died down it comes time to get busy getting real. If you haven’t already done so, here are something things to think about:
1. Establish WE INC.
Hopefully you started talking about the money before you got hitched, but if you didn’t today is the day.
Once you get married, get back from the honeymoon, or get the boxes unpacked, it makes sense to take some time to have another chat, perhaps creating a mission statement that reflects your joint goals. Sure, you have individual goals, but this is where you talk about what you want to achieve TOGETHER. When will you buy a home? How much downpayment will you save? How must house will you buy? When will you have children? Who will stay home? For how long? How will you cover the income shortfall? How often will you go on vacation? Who gets to make the big purchase decisions? With or without the other guy’s input? You get my drift.
If one or both of you brought debt to the relationship, now that you’ve combined households your individual expenses should have gone down. Before you get used to spending that money, make a plan for using it to dig yourselves out of the hole.
You’ll also want to talk about how you’ll manage your money now that you’re a team, which will lead to…
2. Combine Your Cash
I’m not a big proponent of giving up your financial individuality, but I do believe managing joint expenses together makes more sense than just divvying up the bills. Making a budget together and having a joint account forces you to be accountable to each other, and keeps both people in the loop at all times. How much you put into that account and what you put through it is something you’ll have to negotiate.
3. Talk to Your HR Department
Will you add your partner onto your benefit plan? Can you claim from both? Do either of you have to pay? Assess what’s available to you now that you’re a family and make it work, as opposed to just carrying on cluelessly. You will also want to update your beneficiary designations for your insurance policies and retirement accounts.
4. Check Your Insurance
Very often marriage indicates “stability” and this can have a positive effect on your auto insurance rates. If you combine all your insurance with one carrier (for vehicle and home) you’ll pay less too. You’ll also want to change your beneficiary designations on your private life insurance. If only one of you has insurance, it’s time for the other one to get with the program!
5. Make or Update Your Wills & PoAs
Wills made before you were married carry no weight unless they were made “in contemplation of marriage”… Willsy Language for “you took your new mate into account.” If you don’t have a Will, its time to make one. Ditto Powers of Attorney for both financial and personal care. If you can’t speak for yourself, your mate should be able to voice your wants on your behalf.
Now that you’re firmly committed to each other — living together is a big step and getting married adds a ton of paperwork — you can no longer afford to have secrets, squash your little voice, or pussy-foot around. These aren the final few steps you need to take to make sure you’re covering your new family’s financial needs as you step off together on a new adventure.
August 5, 2010 at 6:19 am
I pray that most couples would talk about this before they get married. I went to two weddings this past month and gave one couple your book for their shower along with David Bach’s Smart Couples get Rich. And the other hand knit dishclothes and my airmiles card and pin so they could get something they needed.
I have always been open with my friends about the price of weddings, house and kids so they can learn from my mistakes since I got pregnant, bought house, finished school, got married, and had cancer before 24 years old. Now we are going on thirty and they are all experiencing this now. My husband and I had to take a marriage course with the church and 3 other couples before we got married. It was funny because had the baby, joint accounts, house and were by far the youngest, but the facilitor kept asking us questions since the other couples were just getting to that point and a couple had never even talked about these issues before the course. I should go back and look at the workbooks now 5 years later to see if we have fulfilled some of what we thought was imporant and what has changed.
The thing I need to look into is our wills. We just got them done last year but now have moved to Quebec and they might not be valid anymore… anyone know out there?
August 5, 2010 at 7:19 am
Great Advice Gail,
When my wife and I got married we combined all of our money into a joint account and did all of our budgeting together. The only money I don’t have to tell her about is the money that is in the “Jason” Jar. Any big purchases we discuss first and make sure we have the room in the budget for the purchase. She is on work benefits, and we got life insurance just after getting married. Wills and POAs are all up to date.
regards,
Jason
August 5, 2010 at 7:38 am
My goodness! People get married without discussing these things? Especially the points in question one!? That is terrifying.
When my fiance and I moved into our house 2 years ago, I was 20 and he 22. We had already discussed how we were going to handle finances (joint account), when and how many children, what pace we would do repairs/renos/saving/spending at, and all that good stuff. Yet people thought we were too young for the responsibility! Makes me laugh, knowing that it’s the older cohabitors who are guilty so much as the younger.
August 5, 2010 at 9:13 am
We’ve done all of those things except the POA and the DH’s will. He’s seriously squeamish about paying a solicitor to do it properly and I haven’t had the energy to force the subject.
We subscribe to the mine/yours/ours account system with equal personal spending amounts (everything else is joint), because our incomes have always been roughly equal and it seems like quibbling over a few quid difference a month if we go by percentages. It also smooths things out while the DH is between contracts. I guess if we were to have wildly different incomes in future, there might be some issues there, but we’ll discuss it frankly if/when it happens. I love that I never have to worry about bringing up the subject of money with the DH. We’ve never fought about that particular topic – disagreed, yes, but we are both good at compromising.
August 5, 2010 at 10:14 am
@ Alison – ask your husband if he wants to go through years of litigation because he didn’t want to spend $400 on getting wills/poa done properly. It’s a one time cost and then it’s done. He probably pays more than on his cable tv in 5 months, and doesn’t get any lifetime value after those 5 months are up. If I were you I’d take the initiative and call a lawyer and just say you’re doing it, and it would be cheaper if you did it both together. I can’t emphasize this point enough, git r done.
August 5, 2010 at 10:17 am
Jordan and I just did this!!
We have had a joint account for quite some time for bills and rent…but we took it one step further and now pay a joint credit card from this account too – and our pay chques go into our joint account too. WE get $100/week allowance for our personal expenses.
August 5, 2010 at 10:32 am
Couples should really think twice about putting all their earnings into a joint account. This is not a good decision. Alison’s mine/yours/ours system is a much wiser plan.
August 5, 2010 at 10:46 am
@Linda: It’s usually a good idea to include the reasoning behind statements such as those.
August 5, 2010 at 11:01 am
Linda, a joint account is the only system that makes sense if one of you stays home (so there’s only one income). Sure, you could each take money out of that and have 2nd and 3rd accounts for ‘fun money’ for each of you if you want, but we’ve happily worked with 1 account for 30+ years of marriage.
August 5, 2010 at 11:16 am
My nephew and his fiancee are getting married in two weeks. Ages 24 and 22. They both have good paying jobs. The odd time they bring up money I try to gently slip in some Gail wisdom about saving 10% or starting RRSPs and quickly get shut down with a ‘yeah yeah we know what we are doing’. It’s so hard to bite my tongue and just move on when I know they are not saving and they have not started RRSP and have loans on 2 vehicles, a quad and 2 seadoos. I guess they will ask someone when they are ready, but it hard not to want to share.
August 5, 2010 at 11:36 am
One thing that is missing from the above is a cohabitation agreement for couples who are living together – especially those with joint property and/or joint debts.
When the time comes for one party to get out of the relationship it can be an absolute mess for common law couples!
August 5, 2010 at 11:42 am
My husband and I will be married 4 years in September and we still haven’t made the leap to a joint account. We have an empty account all set up and ready for us, but still haven’t done it. We share all of our money in a confused system that probably only makes sense in my head (he pays for a,b, and c, I pay for d, e, f, I do the saving for both of us, he pays off the debt for both of us, etc). I think we should get our salaries automatically deposited into one account and then withdraw certain amounts to put back into our separate accounts, so why is it so hard to make the change?
As far as health benefits go, we had someone tell us that I should opt out of my health benefits and just use my husband’s plan so we could save more money (I pay for mine, but he doesn’t). But, we feel privileged to have 2 health plans to draw from if needed…I hurt my back 2 years ago and used up all the physio and chiro money available to me from both plans. What do others think…one set of health benefits or two?
August 5, 2010 at 12:22 pm
Man, off topic but what’s with all these kids getting married in their early 20s. I thought me getting married at 30 was early, guess I’m in the minority on this one.
August 5, 2010 at 12:43 pm
Patricia my husband and I had that debate a while back on the 2 health plans or one. What we decided was that the more coverage the better. I think you hurting your back last year and using up both allotted amounts for chiro and so forth is a prime example right there of why it’s good. What one doesn’t not cover or you use all of the other is a back up. And if your really only paying for one how much would you really save if you end up needing to spend hundreds later to cover expenses like chiro and such.
August 5, 2010 at 12:49 pm
erin:
Go see a lawyer. In Qc, when you are married, you are married. The court could easily overturn part of your will if it is against the rules. Learn about “irrevocable beneficiary”.
“mine/yours/ours system is a much wiser plan”
Three accounts does make sense. Everybody should have their own part of the 6 months emergency fund. You can put your fun money in your own account. If something goes wrong with one account because because of an oops at the bank, you can deal with it until things get resolved. If you need a way out, you have one. Someone is ill, someone dies… Seperate RSP systems are good too.
Geoff: people are legal to get married before they are 20
Alison: A will is a must and it is a big form of respect. You do not want to deal with all that cr*p during a VERY difficult time in your life. I know people to tried. No one lives for ever… as far as I know… Accidents happen.
August 5, 2010 at 1:02 pm
Oh, I have a will. Copied my mom’s, actually, which was done by a lawyer. But the DH doesn’t have one, and neither of us have PoAs. But you will all be pleased to know I got a quote from our solicitor today to re-do mine as a pair with the DH’s, along with the PoAs, and we will be visiting the office next week to sign. He didn’t really mind too much when I said I’d be willing to forego a trip to Ikea in return for peace of mind.
August 5, 2010 at 1:18 pm
Marie; I don’t believe that Geoff meant it in a bad way – just that he is surprised that many are so young – early 20’s when getting married – I was 29 and my DH was 34 when we got married. Many now a days are delaying marriage until after post secondary schooling and I suspect Geoff was just surprised that there seemed to be a lot that still got married “so young”.
Personally, I know that I would not have been ready at 21 to get married – I was still in University and didn’t start dating my DH until I was 25.
August 5, 2010 at 2:57 pm
my fiance got married young–he was about 24, she was about 23. they lasted two years. we are getting married this september–I am 31, he is 34. we don’t have a joint account. i am not sure we will. when we got together, i already had a house, so that isn’t really an issue. neither of us wants to move into another house any time soon. as far as discussing kids, it’s a bit different for us, as it would require some medical assistance–at least the kid will be planned!!! we would both like a child but we also both realize we need to be out of debt before we have one. since i make more, he’d stay at home. and yes, we’d definitely plan for that
as for vacations, neither one of us is ready to go jet setting just yet. we both feel that is something to do when we are older, when we are debt free. we do, however, both want to go to the same places, so yay for that. big purchase decisions are for both of us to make. he’s already come to me for one or two things he wanted to get–he talked to me first. i do need to have a will done, though. i’ve been thinking about that a for a while now–i realize how important it is and will do it as soon as i can. one thing i’ve noticed, though, is that when i try to talk to him about what he’d want in terms of a funeral or burial/cremation should he pass away, he gets very uncomfortable and won’t talk about it. i kind of need to know that stuff, don’t i? it’s weird–he has cf and has been told over and over that he’ll be dead by such-and-such an age, and it has not come to pass–but he’s been forced to face his own mortality. he says he’s not afraid, yet he won’t talk to me about whether he wants burial or cremation. i don’t get it.
August 5, 2010 at 3:58 pm
‘to everything there is a season’ King James Ecclesiastes III or Pete Seeger (1952)….
you pick.
In the ‘olden days’ people wed in their very early teens. Life expectancy was around 30. I don’t think there is a right or wrong age to marry. It is an individual decision.
We married at 20 and 22 – got pregnant 4 months after the wedding and the rest they say is history. It worked for us.
I agree with one pot of money. Course perhaps I say this because I’ve handled the money (and not always wisely….but I’ve been Gailvazoxladeized).
Dotting all your i’s and crossing all your t’s in regards to POA’s and wills is a must. In my humble opinion to do otherwise is selfish. Think of those left behind trying to cope.
August 5, 2010 at 7:16 pm
hmmmm…thank you gail for a wisdom-filled post. i don’t find myself in this position quite yet, though my boyfriend (? not sure about the correct terminology in this day and age ha ha) and i have discussed moving in together. i love my living space, and it’s closer to work for both of us. we’re just not quite ready to make that leap and personally, i’d like to be out of debt before i do. it’s just a few months away so i can wait.
as for marriage and age, i gave it a whirl at 21. after 7 years, i have to admit i failed. we divorced and to this day i believe i was not fully prepared for the work a successful marriage requires. i think each of us mature at different ages and if a young couple feel they are ready, then it’s up to them. i don’t know that i’ll ever marry again; perhaps. i feel more prepared this time around, thankfully. we’ll see what the future holds. in the meantime, congratulations to you “youngsters” getting married. wishing you blessed & long long happy marriages!!!
August 5, 2010 at 9:16 pm
You should also update your martial status with the CRA, particularly if you have children from previous relationships. It can affect your credits.
August 8, 2010 at 3:57 pm
We got married at 20 and 21, built a great life in a one bedroom apt in TO.
We moved on and bought our first house at age 26 though it was in another province. We fixed it up ourselves and loved it. We stayed in this house for another 20 years before moving. I went back to school in this time frame and became a engineer.
We bought a beautiful piece of property, an old farm field, 12 acres.
We sold our 1st home and built our 2nd one.
We’ve had some new vehicles and some great used vehicles.
We’re now both on the path to retirement and have never had to worry about looking back or forward.
Did we discuss money at such a young age when we first got married? You bet your ass we did because I wasn’t going to be like my parents who really never discussed the money issue.
This is over 31 years ago and I feel I was a Gail guru back then and will continue to be everyday.
August 13, 2010 at 4:24 pm
Gail is correct. Combine all accounts – makes everything easier.
August 19, 2010 at 9:41 pm
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