10 financial considerations for newlyweds

Marriage marks an exciting new chapter for you and your partner. As a recent newlywed myself, I understand how much there is to plan as you look ahead to your future together. That’s why it’s essential to take time to focus on your finances as a couple.

Every couple manages their finances in a way that works best for them, but what truly matters is having open conversations, exploring your options, and aligning on your shared goals. To help you build a strong financial foundation, here are some considerations to keep in mind.

1. Budgeting and managing joint expenses

Every strong financial plan starts with understanding where your money is going. Creating a budget that reflects your combined income and shared expenses is a great place to start.

Think about:

• Joint household expenses like rent or mortgage payments, groceries, and utility bills.
• Personal spending: Maintaining some financial independence is important, so consider setting aside individual ‘personal money’ within your budget.

Revisit your budget regularly to ensure it aligns with your changing priorities.

2. Review your bank accounts

How you manage your banking as a couple is entirely up to you. There’s no right or wrong approach – just what works best for your partnership.

Think about:

• Joint accounts: These are great for managing shared expenses, such as household bills. However, keeping individual accounts for personal spending ensures both of you retain financial independence.
• Savings accounts: Decide how you’ll save. Will you work towards shared goals like a house deposit, or will each of you focus on different priorities? Having clarity here is key.

Openly discussing your preferences ensures a clear and manageable process going forward.

3. Protection and insurance

Life is full of uncertainties, but having the right protection in place can bring you peace of mind.

Think about:

• Life insurance: If you’re planning to buy a home or start a family, a life insurance policy ensures your spouse is supported financially should the unexpected happen.
• Income protection: Illness or injury can happen to anyone. Income protection insurance provides a safety net by replacing a portion of your income if you’re unable to work.

Taking these steps now could save significant stress in the future.

4. Mortgage and housing

If buying a home is part of your plans, it’s important to understand your options for property ownership.

Think about:

• Joint ownership: This means both partners own the property equally, and ownership automatically passes to the other partner upon death.
• Ownership in common: This arrangement allows each partner to own a specific share of the property, which can be passed on separately.

Discussing these options early helps you make decisions that suit your circumstances and aspirations.

5. Estate planning

Marriage is a good time to revisit or set up your estate plans.

Think about:

• Writing or updating your will: Without a will, your assets may be distributed according to default intestacy laws, which might not reflect your wishes.
• Consider a Power of Attorney: Assigning this to your spouse or another trusted person ensures someone can make financial or medical decisions on your behalf if needed.

This planning might feel daunting, but it’s an important step in protecting your partner and your assets.

6. Setting long-term financial goals

Your shared goals shape your financial journey together. Take time to talk about what’s important to both of you.

Talk about:

• Buying a home
• Travelling
• Starting a business
• Planning for you children’s education
• Retiring early

Having these conversations helps you align your priorities and create a savings and investment plan that reflects your aspirations.

7. Retirement planning

It might feel far away, but the sooner you start planning for retirement, the better positioned you’ll be to enjoy it.

Talk about:

• Your ideal retirement lifestyle
• Existing pensions and contributions
• Additional investments or savings you might need

Regularly revisiting these plans will ensure you stay on track as your circumstances evolve.

8. Building an emergency fund

Life can throw unexpected surprises your way, and an emergency fund acts as your safety net. Aim to save three to six months’ worth of living expenses in an accessible account. This fund can help cover anything from unexpected repairs to unforeseen medical costs.

9. Understanding taxes

Marriage may bring opportunities to streamline your taxes:

• Consider whether transferring unused tax allowances could reduce your overall tax bill.
• Review how your joint financial situation affects your tax brackets or liabilities.

Tax is complex, which is why we recommend speaking with a tax adviser, who will help you understand what would work best for your personal situation.

10. Division of assets

While it might feel unromantic, discussing how assets would be divided in the event of a separation can save a lot of heartache down the line. Prenuptial or postnuptial agreements offer clarity and peace of mind for both parties.

Taking the time to address these financial considerations now will provide you with clarity and direction as a couple, helping to set you up for long-term success.

Our experts are here to provide personalised advice, helping you create a wealth plan that supports your goals. For more information, please speak to your private banker.