Mikaela is getting married to Teddy! He asked her at a very romantic sushi dinner in downtown Manhattan over the holidays. Teddy is a famous songwriter and you’ve heard some of his songs on Spotify or Apple Music.
As they prepare for the big day, they have to decide on flowers, menu, and guests. Talking through a lot of financial matters like money values, taxes, and building a financial system together is more important.
Money Values
Mikaela and Teddy will have different money values. These discrepancies exist in every romantic partnership. How you grew up and what your parents told you about money influence your money values.
First, it’s important for each person to be fully transparent about every financial aspect in their life – income, assets, debt, investments, savings, taxes, money habits, money dreams, and other items.
Mikaela is getting married, and here are some questions for her and Teddy:
- Are you more likely to be a spender or a saver?
- What is your attitude towards debt?
- How do you define a “good life” (travel, home, flexibility, legacy)
You don’t need the same values as your future spouse, you need compatible ones.
Taxes, Insurance, and Beneficiaries
Second, you will now be filing taxes as a married person – married filing jointly, or married filing single. You will have to account for each other’s tax information, like withholding tax amounts, capital gains taxes, and taxes associated with equity compensation.
Then insurance coverage has many considerations. Examine each other’s health insurance and find out who has better spousal coverage. Life insurance is a consideration if there is an income disparity. Renters or homeowners insurance is a good idea depending on your living situation.
Last, update your beneficiaries on the following accounts – 401(k)s, IRAs, investment accounts, bank accounts, and employer benefits.
Create a Shared Financial System
Finally, Mikaela and Teddy will map out a shared system that covers financial goals over different time periods – short, medium and long term. They can add other items to their system like an annual budget, a dollar limit for one-off purchases, and how to pay down debt versus saving more money.
If you are getting married soon, or have been married for a long time, reviewing and establishing money values and a financial system are important. You can talk through what’s important, what you want, and how to do it.
These will be tough conversations. Building a tangible financial system from intangible values is hard. If you need help, get in touch with me.