Financial planning for newlyweds: How to build a plan as a couple

Our mindsets change when plans for "me" become plans for "we" ahead of and after a wedding. As you enjoy the process of combining households and spending more time together, you'll also need to learn how to manage money as a couple.

You don't have to agree on every financial choice. But financial planning for newlyweds can help you learn where to start and what to discuss together.

Through key conversations about money, you can open up about your past and current financial experiences and get to know each other's money mindset. Having a clear understanding of each other's financial perspectives and goals can unite you further as a couple and help you accomplish more together than you could on your own.

Plotting a financial course with your partner starts with knowing where each of you stands. If you sense differences, bring those to light. They can help you navigate compromises on shared choices. Start by addressing these key areas:

Talking about money with your partner can be a valuable way to understand each other better. Prepare for the conversation by reflecting on the money mindset that drives your own behavior before asking about your partner's. Here are some questions for the two of you:

• Do you have an abundance or scarcity mindset? That is, do you feel comfortable with how much money you have and your ability to earn more? How does that affect your spending and saving?
• Is money a source of stress for you? Are budgeting and saving overwhelming, or do you feel confident about financial literacy and your plans?
• Do you enjoy managing your money? Does it make you feel more in control of your future, or are you flooded with uncertainty and view it as a chore?
• How comfortable are you talking about money? Are you afraid others will judge you if they know how much you earn, save or spend?

Learning about each other's financial mindset can help you create an atmosphere of compassion and respect before sharing the facts about where you each stand. At a minimum, you'll want to exchange:

• Earnings and spending habits
• Types and amounts of debt
• Savings, retirement and investment accounts
• Credit scores and the experiences that shaped them
• Future financial goals

After discussing your financial mindsets and current situations, it's time to align your financial goals and values. Consider how you'll make decisions that reflect your shared values, such as family, stability and generosity.

As individuals, you likely had plans for your money, time and energy. These aspirations matter to your partner too, but they may need adjusting now that you're a couple.

You may retain some priorities, but you'll also develop new goals and values together, which may require trade-offs and compromises. For example, you might want to support a financially insecure sibling, while your spouse wants to invest in a friend's business, and both of you aim to retire by 65.

You're doing the right thing for your relationship by talking about your finances, even if it's difficult. But if you're having trouble getting on the same page or figuring out your next financial planning steps, help is available. Here are some resources to try:

• Financial therapists can help you work through the complex interplay of money and emotions, especially if you've experienced financial infidelity, bankruptcy or other challenging events.
• Virtual or local financial planners or advisors are available to help you identify or refine your shared goals—and suggest paths to help achieve them. Keep in mind that you don't need to have a high net worth or investment experience to work with professionals.
• Your church may offer free or low-cost premarital financial counseling or financial planning for newlyweds, either one-on-one, in small groups or through classes and workshops.

Once you're married, any financial choice you make as an individual almost certainly will affect your spouse—and possibly your spouse's family. After sharing your financial habits, goals and values, it's important to decide how you'll manage your shared financial future. Here are several common financial adjustments newlyweds need to work through:

Getting married does not automatically merge your existing assets and liabilities, but it does affect your future ones.

Before you combine accounts, pay down each other's debt or take out a loan together, consider talking with an attorney. He or she can explain how a prenuptial agreement (or postnuptial agreement) might benefit the two of you. It's especially important to get professional guidance if you:

• Live in a community property state
• Have children from previous relationships
• Need to provide for a dependent of any age
• Have substantial assets or liabilities (such as a business, inheritance, trust fund or student loans, unpaid taxes or gambling debt)

You may want to hold off on comingling major assets or making impactful moves before talking with a legal professional as well as a financial advisor. Even if you have already made big changes, it's still worth it to get ongoing advice about best practices and what's right for your situation.

You and your spouse already have credit scores, and that won't change after marriage. You'll keep your individual scores. In most cases, any debts you bring into the marriage remain your individual responsibility.

However, there are ways that one spouse's actions can impact both of your credit scores or debt obligations after marriage. Here are three example situations:

• Your spouse agrees to manage all your bill payments but forgets to pay your credit card for over a month. Your credit score takes a hit.
• One or both of you sign a loan agreement (anywhere, in any U.S. state), but you live in a community property state. The payment history on that loan will affect both of your credit scores, and you'll each be fully responsible for the balance.
• One of you overspends from your accounts, and there's not enough money left to pay your mortgage on time. The late payment will hurt both of your scores.

When you're married, you can choose whether to file taxes jointly or separately. You can make this decision annually; you're not locked in when you choose one or the other. In some cases, you even can change your mind after you've submitted your returns and the filing deadline has passed. If you file separately, you can later amend your returns and file jointly. However, you cannot file jointly and then later amend and file separately.

Many married couples save money by filing jointly, according to the IRS. But there's no universal rule about whether filing taxes together as a married couple will save or cost you money. It depends on the facts and circumstances of each couple's finances.

When you file separately, you can't take certain deductions and credits, such as student loan interest deductions, child and dependent care credits and the Lifetime Learning and American Opportunity Tax Credits. Also, you both have to make the same choice whether to itemize deductions or take the standard deduction.

On the other hand, filing separately may save couples money when one spouse earns dramatically more than the other and itemizable deductions are sizable or when one spouse is repaying federal student loans through an income-driven repayment plan.

Consider preparing your returns both ways to see which filing status is more favorable to submit. A tax professional can help if you're uncertain which is best for you.

Reconsidering your insurance and estate planning needs is an important part of making sure things go smoothly if something happens to one of you.

Life insurance can provide a financial safety net for your spouse and other loved ones who depend on you, be they minor children, aging parents or disabled siblings. Even if one spouse's income is significantly higher than the other's, it's often wise for both spouses to have life insurance policies. A second income or a spouse's administrative or caretaking responsibilities can be sorely missed if lost suddenly.

For the same reason, it's a good idea for each of you to consider disability income insurance. If one of you becomes seriously ill or injured, your household income and ability to keep up with routine responsibilities could plummet at the same time your medical bills and caretaking responsibilities increase.

If you already have coverage, review whether you might be underinsured for your new circumstances, especially if you think you'll add children to your family or have other dependents. If your coverage is tied to your workplace, consider getting individual policies that will stay with you even if you get laid off, reduce your hours or change employers.

It's also a smart idea to create or review your wills, powers of attorney and any advance healthcare directives or trust documents. You may want to add your spouse to the paperwork, remove a former spouse or provide for children from a previous relationship. Right after marriage is also a great time to review the beneficiary designations on your financial accounts and insurance policies, and update them as needed.

Every marriage deserves a financial plan. This essential blueprints can help you cultivate financial security and prevent financial stress in your relationship. A solid financial plan encompasses the following and more:

A cash flow strategy helps you prioritize what's important to each of you individually and both of you as a couple. Consider different budgeting methods and see which one is the best fit for your circumstances.

Some key elements of cash flow management to talk through together include:

• Who will keep a close eye on your accounts and make sure you're spending sustainably for your income?
• Are there any frequent spending habits to cut, such as entertainment costs or dining out?
• Do you want to reduce how much you spend? If so, how?
• Can you save money or improve coverage by unifying your auto, home or health insurance policies?

These conversations can prevent unpleasant surprises with each other's spending habits and help you avoid feeling controlled or controlling about where the money goes. By creating a system you're both satisfied with, you each can feel freedom and confidence.

Debt is a fact of life for most people, and minimizing it requires a focused strategy. Getting clear on the balances owed and interest rates on existing loans and credit cards can help you work as a couple to prioritize paying off debt, possibly using the popular debt snowball or debt avalanche methods.

Plus, reducing how much you owe and making payments on time can improve your credit scores and create space in your monthly budget. Both of these accomplishments can make it easier for you to meet future goals.

At some point, you might decide to take on new debt. Ideally, this will be low-interest "good" debt used to purchase an asset, such as a house, or to further your education to boost your income. By following the budget you've agreed to, you may be able to avoid costly, high-interest debt going forward.

While you may be wrapped up in newlywed bliss, not to mention possibly moving and setting up a new household together, don't forget to plan for the unexpected. An emergency fund can reduce your stress and expand your options when something happens, like a job loss, major car repair or furnace breakdown.

If you don't have any savings, learn how to pay yourself first, and start with small goals: Try to save $100, then $500, then $1,000. Eventually, you may save up a full month of essential living expenses, then you can set your sights on three months. Talk together about how accumulating an emergency fund fits with your other financial goals, like paying off debt, saving for a down payment or contributing to retirement accounts.

People of all ages marry at different life stages, but it almost always means big plans for your shared future. You may want to buy a home, take a vacation or expand your family. You may be about to launch a business or go back for another college degree. Whatever the goal, include it within your overall financial plan.

An key part of that plan should be where you'll keep your savings for short-term goals. Financial institutions often offer low interest rates for basic savings accounts. With a little research, you can find accounts with more earnings that offer just as much liquidity. With some accounts, your savings have a fighting chance against inflation; you might even outpace it. Consider how a high-yield savings, certificates of deposit (CDs), savings bonds and other short-term savings options might work for you.

Once you've decided on your short-term goals, it's time to consider longer-term planning. If you're not ready to do this right away, make a date to discuss it in six months when your lives may feel more settled. Here's what you'll want to talk about.

You're never too young or too old to reap the advantages of contributing to a retirement account. These accounts have tax advantages that can save you money and help you accumulate assets faster.

Many people start with a employer-sponsored retirement plan such as a 401(k) or 403(b). These can be extra beneficial if your employer offers a match on your contributions.

If you're self-employed, you can set up your own plan, like a solo 401(k). And almost anyone with earned income will be eligible to contribute to a Roth or traditional IRA. If one spouse doesn't work, the income-earning spouse can contribute to an IRA on their behalf.

As with emergency savings, there's nothing wrong with starting small. Automate your savings and investing and revisit your contribution levels once or twice a year. Before you know it, you'll likely have a surprising amount saved.

What do you hope to achieve in the next 10, 15 or 20 years? Perhaps you aspire to start a business or nonprofit or send your kids to private school or college. It's a good idea to share your down-the-road aspirations with each other, no matter how far-fetched they might seem.

These may not be dreams you can splurge on today, but you can build them into your financial plan now and start committing to them a little at a time. You may want to open a college savings plan or invest in a mutual fund to try to gather seed money for a startup. The skills you build and the financial progress you make toward your goals could make your dreams more achievable than you imagined.

Over time, your savings can become a substantial, diversified, growing portfolio if you learn and practice investing wisely. Your portfolio might include stocks, mutual funds, bonds and other securities.

Along with making investing a habit, other keys to your long-term success are keeping your investment fees low, not chasing fads, limiting taxes and holding steady through market downturns. Many people turn to a financial advisor for help with both the technical and emotional aspects of executing a long-term investing plan.

Much like savings, generosity can be easier when you build it into your financial plan (rather than treat it as an afterthought). Work together to discuss how you prefer to help others, whether it be through donating money, volunteering your skills or giving time to help your community.

Once you land on what you want to do, decide how you'll commit to your giving goals. You might include donations in your monthly budget, choose a weekend each month to get involved with your church or charity or work on leaving a legacy gift through an estate plan. Cultivating your passion for generosity together can strengthen your bond with each other.

Managing your money as a couple is a lifelong endeavor. Before marriage, you've each built up different financial histories and individual money goals. Going forward, it's important to respect each other's pasts and build on them.

Though it might sound overwhelming at first, it can be rewarding to map out a journey together. Protect each other and plan for your future goals today by connecting with a local Thrivent financial advisor.