Financial Advice for Newlyweds

Important things to consider when combining your finances 
After you get married, there’s more that you have to worry about than which kitchen appliances you’d like to keep and which you’d like to give away. When you combine households, you combine finances too, and this isn’t limited to your savings and checking.

As a married couple, you join together in debt, but how you join together is dependent on where you live. If you reside in a community property state, all of your debt is shared equally. Essentially, this means that if the two of you split up, each of you is responsible for half of it.

If you live in a common law state, the debt belongs to the person who accrued it. The only case in which you really share the responsibility is if you buy property together, such as a house or a piece of furniture, which can be considered a necessity for the family. Either way, you need to be careful with your credit. To find out more about how debt is divided, contact a tax advisor or legal counsel.

You want to preserve the person with the better credit ratings’ history if at all possible. If one of you is not responsible enough to repay debts on time for whatever reason, you may wish to keep that person’s name off of your loans. If that’s not possible because you need the dual income to be eligible for the loan, use automatic payments so you don’t have to worry about missing one.

Insurance Coverage
Another thing to think about is whether or not you want to combine your insurance coverage. If you merge to a single insurance plan under one of your employers, it’s likely you can pay a lower rate. Many employers offer a family plan, which can be ideal if you hope to have children in the near future. This could save you hundreds of dollars a year.

If, instead, you decide to each keep your own existing health plan, which is perfectly okay, you can still claim one another on each other’s plans and receive what is called double coverage. With double coverage, your primary insurance (the one you’re your employer) covers most of your expenses, but your secondary insurance (your spouse’s plan) can pay some of the leftover charges; for example, possibly your copay. If you opt for double coverage, keep in mind that some doctors do not accept it as a form of payment. Also, it may not be worth the extra money you’ll have to pay in premiums.

Another way you can potentially save money is by combining your car insurance. Most companies offer some kind of multiple vehicle discount. Getting married sometimes makes you eligible for policies that you wouldn’t have been able to get before even if you were living in the same household.

Filing Your Taxes
There are two ways to file taxes when you’re married, either married filing jointly or married filing separately. It’s smart to file jointly if one spouse makes significantly more money than the other one. When you combine the income of both, you could end up in a lower tax bracket since the brackets are higher for married people than they are for singletons.

When you file separately, it’s essentially the same as both of you filing as if you were single. You may want to go with married filing separately if one spouse has a lot of deductions – enough that they are considerably more than what the standard deduction would be. This sometimes happens if one spouse has a significant amount of medical expenses. If this is the case, you could get more money back come April 15th or pay less in during the year by adjusting your withholding accordingly. It’s also a good idea to file separately if one of you is having some trouble with the IRS. That way the spouse that is in good standing is not responsible for the other’s mistakes. To find out more about your tax options, talk to your tax advisor or visit

Now that you’re married, it’s time for the more fiscally responsible spouse to start holding the other one accountable. If you want to have a financially healthy marriage, the time to start doing so is today. 

This post is from our On Your Way site for young adults. Visit the site for more articles and video to increase your financial literacy!

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