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Newly Married? Here’s Your Guide to Financial Planning

Newly Married? Here's Your Guide to Financial Planning

As a newlywed couple, you’ve just made a huge, wonderful step to embark on a whole new life together. Where there was once two, there is now one, where everything you each have is now shared together.

Among these shared things is your finances, and everything you’ve managed to, and hope to build, is now merged with that of your partner.

Managing your finances as a newly married couple can be both complex and intimidating, especially if you might feel you have no idea how to go about it. However, with the right approach and clever strategies, you can ensure a firm control over your finances as newlyweds.

Read on to find a complete guide on the best ways to go about financial planning, as you begin your new married life together.

1. Discuss Your Financial Histories, and Establish Your Futures

One of the most important things to do as newlyweds conducting financial planning, is to discuss your financial histories and future goals with each other.

Your individual financial history, and that of your family, is pivotal to the success of your new shared financial lives. You may have certain habits or traits – good or bad – when it comes to money, and you may have learnt certain behaviours from parents or family members. This can also include any financial insecurities.

You must also discuss your future goals. How do you each plan on managing your finances? Where do you see yourselves financially in five, 10, or even 50 years?

Each person will have slightly different ideas of how to manage their finances, and discussing these will help you build the best financial plan, which suits both of you and your new shared life.

2. Open Shared Accounts

Shared accounts are another great way to manage your finances as a newly married couple. You may have your own separate accounts from before your marriage, and this is still an option going forward, except it may prove harder to budget and monitor your expenses.

When you put your money into a shared account, you can instantly see how much money you have collectively to spend as a couple, without the hassle of calculating from different accounts.

Also, any contributions made to this account can be easily done by either partner, and the income and outgoings are clear to track and manage. This is a perfect way of showing your entire finances as a couple, for all kinds of ventures or decisions that impact the both of you.

3. Consider Estate Planning and Inheritance Tax

Discussing the state of your finances for when you, or your partner, pass away, can be a sensitive topic. However, it’s one of the most important things to consider as a newly married couple.

You have both taken on the responsibility to care for one another, as well as any children you may decide to have, so estate planning is the best way to do this. Many partners name each other as their beneficiaries, whilst others name their children.

There is also inheritance tax (IHT) to consider, which places a tax on any estate inherited which exceeds a value of £325,000 – the current IHT threshold (as of tax year 2021/22). However, if you leave everything to your spouse, IHT is not applied. Therefore, these are things to weigh up when discussing your future financial plans.

4. Explore Risk Protection

Risk protection is also something to consider for your future life together. There are many unpredicted circumstances that could drastically affect your finances. This could include injuries or sickness which prevent one of you from working.

To manage this, there are many insurance policies available that allow you to, under certain requirements, prepare for these things and mitigate any financial harm.

5. Plan for Retirement

Many couples dream of the perfect retirement lifestyle, when they can live, explore, and spend all their time together. As newlyweds, you can hugely benefit from getting ahead with some early planning for your retirement.

Be informed, of course, of the many different schemes and avenues available for your retirement planning, but with careful consideration, you can begin a promising financial journey towards your future retirement. This can bring a sense of relief and security to your financial position as newlyweds.

All these tips are vital for newlyweds who are financially planning, but to not approach them properly can do more harm than good.

Therefore, it is highly recommended that you consult with a professional financial adviser, who can give you extensive advice and guidance on your newlywed financial plan.

The value of investments can go down as well as up and you may get back less than you invested. This article is not intended to be an offer or solicitation to buy or sell securities, nor does it constitute a personal recommendation. Any tax benefits will depend on your personal tax position and rules are subject to change.

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