Five financial tips for newlyweds
Ah to be a newlywed! Well, at least until the bells have stopped ringing, the honeymoon is over and the wedding bills are in the post.
If you're still clinging on to the last remnants of romance despite the arrival of your Visa statement, discussing home insurance, household bills and wills should be enough to really kill it dead.
Yet while money might not be the most sparkling of conversation topics for just-married couples, financial planning is crucial if you're to live happily ever after.
Here are five top tips that could help happy couples avoid budget breakdown in the future.
1. Protect your presents
Wedding gifts can easily add thousands of pounds to the total value of your home contents.
According to recent research by Direct Line, the average wedding guest spends roughly £79 on a wedding gift. This means that if 100 people attend your wedding, your gifts could be worth a whopping £7,900!
The study also states couples typically spend £4,000 on items such as wedding outfits, flowers and rings in preparation for the big day.
Therefore, it's crucial you check that all your expensive new belongings are covered by your home insurance policy in the event of loss, damage or theft.
If you don't and something goes wrong, you could end up with a serious financial headache on top of the distress of losing your wonderful wedding memories.
2. A couple of cars
If you and your partner are planning to drive each another's cars now you're married, you must make sure you have adequate car insurance in place.
If you have a fire, theft and third party insurance policy, your partner will probably need to be added to your insurance as an additional driver.
If you have fully comprehensive cover, second drivers may already be included as part of your policy. However, you must always check before handing over your keys; if you don't have adequate cover and your car is damaged while another person's at the wheel, your insurer will probably refuse to pay out.
On a happier note, adding your other half to your insurance policy could help to reduce the price of your premium. This is more likely if your partner is the same age or older than you and has a clean driving licence.
Some insurers may view married drivers as lower risk customers, considering them less likely to be involved in accidents than single motorists. Therefore, make sure you inform your insurance company when you get married; depending on your individual circumstances, it may bring down the price of your policy.
3. Married money management
Money can often be a touchy topic.
However, it's important for you and your spouse to understand each other's spending habits at the beginning of your life together if you're to avoid nasty surprises later down the line.
It's important to talk to your partner about how you want to handle your finances, and discuss what financial goals you have for the future.
If you discover one of you is a frugal spender while the other is a financial free spirit, it's important to work together to create a household budget.
Create a spreadsheet and calculate how much money you have coming in and going out of your accounts each month.
Once you've established exactly where your money goes, you'll be able to decide together how you want to spend any spare cash.
4. What's mine is yours
Once you've talked about your spending habits, you'll be in a better position to tackle the thornier issue of joint accounts.
If you do decide to share financial products, you must trust each other one hundred per cent.
Being financially associated with your partner means that if your other half runs into money trouble or already has a blemished credit history, your credit rating could be tainted as a result. Financial associations are made when two people have their name on the same financial product (for example, a loan, mortgage or current account).
Therefore, before you set up a joint account of any kind, it's a good idea for you both to check your credit histories.
If you take out a joint loan of any kind, you also need to check where you stand in terms of liability. Under the terms of most agreements, you and your partner will be jointly and severally liable.
This means that if one of you is unable to meet their share of the repayments, the other could be pursued for the entire debt.
However, credit cards are a different kettle of fish. Credit agreements for credit cards are always taken out in a single individual's name – so even if you add an additional cardholder to your account, it will always be you who's ultimately responsible for footing the bill.
5. Prepare for the worst
Life insurance is certainly not the most romantic of topics.
However, entering into a lifelong partnership and entwining your finances can seriously affect the level of life insurance you need.
If you have a joint mortgage or additional, non-mortgage debts, it's crucial you have enough protection in place to cover your share of the repayments in the event of your death.
If you pool your income, you must also ensure your life insurance will pay out a large enough sum to cover your half of the household bills.
If you don't, your partner (and any children you have) could end up in serious difficulty should you pass away.
Finally, when you're married, it is wise to draw up or update your will. If you die without one, the law will dictate how your assets will be distributed – and this can be a lengthy process.
If you're married, the first person entitled to a share of your estate is usually your spouse. However, inheritance law is incredibly complicated and it's not guaranteed they would receive everything you left behind. Establishing a will is therefore the only way for you to be sure that, when you die, your wealth will go to the person (or people) you choose.
**This material is for information purposes only and should not be considered financial advice. We strongly encourage our readers not to rely solely on this content, but to seek independent advice when making financial decisions.**
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