The pandemic has forced many couples to change wedding plans. Couples are delaying their wedding day or opting for smaller ceremonies. Despite the bumps in the road, the path towards wedded bliss is supposed to be joyful and fun.
The last thing most couples want to do is talk numbers. Which is probably why many couples wait to figure out how their separate bank accounts become one until after the honeymoon. But now, before you've said 'I do,' is the best time to discuss the financial changes that will impact you and your future spouse.
Don’t be scared off by revealing your credit card balance, disclosing your credit score, or putting your salary on paper. Those things are going to come up when you apply for a mortgage or file your taxes together. Not to worry, getting married comes with several financial advantages that will help you and your spouse towards your goals.
Pro Tip: Be sure to have a joint bank account prior to your nuptials because wedding guests tend to gift money. If you receive a check written to you AND your spouse, the check typically has to go into a like titled account. Because the check is written using the word AND you both have equal claim to the funds and the check must be deposited into an account with both of your names on it.
Health insurance is easier and cheaper
After getting married make sure you consolidate your health insurance coverage so that you and your spouse are covered on one plan. Generally, insurers charge less for a single plan with two people on it compared to two individual plans. Compare plans and sign up for the better deal if you both have insurance through work options.
You’ll probably get a better mortgage rate
Marriage does not necessarily give you a better rate because your debt load and credit scores are still considered separately. But combined incomes will probably qualify you for a larger loan with more flexible repayment options.
Better rates on home, auto, life, and long-term care insurance
Studies have shown that insurance companies offer lower rates or a flat-out discount for married couples. Period. Insurance companies typically view married couples as more financially stable because of their dual incomes.
Many insurance companies also utilize behavioral research when determining rates. For example, married couples tend to live longer than non-married individuals. As a result, married couples generally enjoy lower rates on life insurance (you can also get lower rates if you apply at a younger age and before any long-term chronic health issues are realized). Similarly, married couples care for each other as long as they can at home if one spouse requires consistent medical care. At home care reduces an individual’s time in a long-term care facility which translates to a lower insurance rate.
Save a bundle on taxes
Both spouses benefit from filing taxes as a couple. Married couples who file a joint tax return generally end up in a lower tax bracket than single filers. Furthermore, married couples receive a standard deduction twice that of a single filer and have higher income limits on certain deductions and credits.
You can share Social Security Benefits
When the time comes to retire most married people can claim their own Social Security benefits or spousal benefits, which are worth up to 50 percent of their partner’s benefits. Your spouse still receives their full benefits. Taking advantage of spousal benefits can be a great option for couples in situations where one partner pays more into Social Security or when one spouse never worked.
Good individual financial habits are important to maintain into and throughout marriage. Have open discussions with your spouse about spending, priorities, and saving so that you can plan and meet your financial goals.