The first year of marriage is a time of bonding, getting on the same page, and discovering one another. It’s also a great time to start making baby steps toward planning your future. There is no better time to address financial health and establish a plan than in that first year, as newlyweds. If you make plans and changes early in your marriage, you will be grateful down the road. Here are some questions for you and your spouse to consider as you grow together.
Have You Combined Your Insurance?
As newlyweds, there are a lot of little things that need to be done, like getting a marriage license, changing your last name, sharing budgets, combining finances and switching bills. To add to the list, it’s important to switch over insurance as well — Rhoads Insurance Agency can help you explore your options. When it comes to auto insurance, you may find that you will get better auto rates with a multiple driver/car policy. If you don’t have one, now is a good time to purchase an umbrella policy to ensure that you and your spouse have adequate coverage.
Early in your newlyweds stage, you jointly should also make a decision on whether you want to go on the same health insurance policy or stay on different plans. If your employers offer you health benefits, it might be wise to take advantage of their investment in your plan. If you have a goal of starting a family down the road, then it’s a good time to look into short-term disability insurance, which can help offset time off for any unpaid maternity leave.
Is Home Buying in the Future?
Whether you want to buy a home immediately or down the road, there’s no time like the present to begin preparing. Setting the mutual goal early on in your marriage will give you both something to work towards and create a unified front in making it a reality. As soon as you get back from your honeymoon, it’s time to begin saving with the goal in mind of no longer paying rent, but rather having that rent payment go toward a mortgage and ownership in a home.
To get an idea of what home buying would look like and make the appropriate preparations, start researching mortgages as soon as possible. This research will show you various loan types, what your credit will need to look like, what your down payment should be, and potential interest rates you will be working with. You’ll discover things like how conventional mortgages will give you better interest rates — check PennyMac current rates to help you decide if a conventional loan is the best option for you. If you don’t have great credit or you don’t have a substantial down payment, then perhaps an FHA loan would work better.
Do You have a Plan for the Worst-Case Scenario?
The basic estate plan consists of four basic documents:
- Last Will and Testament
- Durable Power of Attorney
- Medical Power of Attorney
- Advanced Directives for a Natural Death
If you had these four documents created before you got married, it’s time to update them to factor in your spouse. If neither of you has these documents, then you should invest in professional attorney fees to have them drawn up.
This basic estate plan will do the following:
- Ensure your assets go where you want at your death (each state has different laws if you die without a will, so don’t bank on the fact it will all go to your spouse).
- Enable your spouse to make all the financial decisions in your stead in the event that you are unable to do so.
- Assign an agent to make medical decisions if you are prevented from doing so.
- Direct your medical team on your end-of-life choices (i.e., Do you want life support?)
Making financial decisions and plans early on as newlyweds will help establish a strong foundation in your marriage. Take the time to do the tedious housekeeping stuff now so that you don’t have to worry later on down the road. Make it a priority to work as a team in all aspects of your life; you will be grateful later that you put in the work.
Contact Rhoads Insurance Agency (484-509-1784) to go over your insurance options and get assistance with retirement planning and college funding.