Homebuyers

Money Smarts for Newlyweds

As you step into your new married life together, if you haven't already, it's time to start thinking like the life partners you've just become. Among the first things you'll want to consider and talk about are your plans and how you will afford them.

Money Transparency

Sharing your financial histories sooner rather than later is your best move. This means talking about everything—from balances and credit scores to any employee benefits you receive—so you can make informed decisions as a couple. After discussing your resources, be sure to share your spending philosophies and goals. Managing your household finances will be easier if you are both headed in the same direction.

Work Out the Details

After sharing your financials, you may also need to revisit how much each of you is withholding from your paycheck for taxes. Couples are taxed a little differently than single-wage earners. You also will want to look at your insurance coverage and change the beneficiary designations for your employer-sponsored retirement plans.

Additionally, you may want to open a joint checking account to handle your household expenses, along with a savings account. This is also a good time to determine if one of you will take on responsibility for managing the monthly bills or if it will be a shared effort.

Taking Credit

Although you may share many things from now on, your credit scores won't be among them, since credit is only scored on individuals. This means that when it's time to apply for a mortgage, the lender will look at both you and your spouse's credit scores, and then base their review on the lower one. Many couples have similar credit scores, but if there is a big difference between of you and your spouse, you should work together to bring the lower score in line with the other before applying for new loans. Until you do, that lower score could boost how much you will have to pay in interest.

Keep Talking

The secret to a successful financial marriage is to be transparent when it comes to money and to keep talking. Check-in regularly on your respective goals, from your individual career goals to your long-term goals as a couple. The more you talk, the better you can plan to have the resources you need when you'll need them.

Common Rules of Marital Finance

• Many couples choose to own assets jointly to ensure they make decisions together.
• Set a limit on spending authority—whether it's $200, $500, or whatever you are comfortable with—to establish at what point the other person is consulted before the money is spent.
• Two can't live as cheaply as one, but typically there is some excess. Agree to save it to build an emergency fund and then to meet your bigger goals, like a down payment on a home and retirement.