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New Mexico State University

New Mexico State University

News Center

Financial Planning Helps Newlyweds

LAS CRUCES -- Reviewing financial situations can help couples avoid potential conflicts as they plan for marriage, said a New Mexico State University consumer education specialist.

Because some of the first conflicts in a new marriage are often related to money problems, couples should talk about finances before the wedding, said Susan Wright with NMSU's Cooperative Extension Service.

"If a newlywed couple has not talked about handling their money, they should schedule a time to do some financial planning," she said. "Each person's financial goals and expectations should be determined. Try to resolve conflicting goals and agree on some spending and saving priorities."

Each person should list all liabilities and assets and reveal any financial secrets. Decide whether current debts will become joint obligations, or remain the responsibility of the individual.

Experts recommend that couples decide how to treat income before they get married -- or shortly after the wedding, Wright said. If both work, a decision needs to be made about whether to pool income into a common fund, and whether each person will make equal or proportionate contributions to the fund.

"Consider the record-keeping implications of the system you choose and decide who will handle the day-to-day money management chores," Wright recommended. "Schedule time early in the marriage to set up a budget and commit to follow it."

Tax and credit decisions also are important considerations. Joint income needs to be estimated, and W-4 forms filed with employers should be adjusted, she said. Not having enough withheld may mean the couple will have to pay the Internal Revenue Service in April.

Couples should discuss their philosophy about using credit cards, Wright said. They may want to cut down on the number of cards they have to reduce annual fees and the easy availability of credit cards. The new bride may decide to keep at least one charge card in her own name to maintain a separate credit history.

Couples also should evaluate insurance and employee benefits. Compare existing policies for life, disability, homeowner and auto insurance, Wright advised. Eliminate gaps or overlapping coverage and make appropriate changes in beneficiaries. If both are employed and receive medical benefits, evaluate the policies to determine whether one plan should cover both, or if each person should add the other.

Finally, brides who change their last name should make changes on all important papers and make address corrections as soon as possible after the wedding, she said. Names should be changed on bank accounts, savings accounts and other banking services. The social security office also should be notified of name changes.