March 30, 2019 at 4:29 pm EDT | by Alex Graham
Now that you’re married, make a financial plan
financial planning, gay news, Washington Blade
Congratulations on your marriage! Now it’s time to get serious about finances.

Congratulations on your marriage! After spending the last several months on planning, your special day and the honeymoon have come and gone, and now you’re wondering what’s next. Whether you’re planning on buying a home, having a child, or simply enjoying life as a married couple, it should all start with you and your spouse establishing a financial roadmap, which includes assessing paycheck tax withholding and updating financial beneficiaries.

The first step in establishing a roadmap as a married couple involves your taxes, specifically your paycheck withholding taxes. Due in part to the “Tax Cuts and Jobs Act of 2017,” signed into law by President Trump, some have experienced confusion and other unpleasant surprises because of changes to the withholding tables. While I always advise reaching out to a tax professional, here is a quick way to do it yourself:

 Step one: Determine if it is best to file your taxes married jointly or married separately. This will depend on how close in salary each spouse makes. There are many ‘marriage calculators’ available to you, but the simplest calculator is hosted by the Tax Policy Center.

 Step two: The IRS website offers a withholding calculator that determines how much tax you should actually withhold based on your filing status. It’s important to make sure to account for any dividends/interest and short-term capital gains. The calculator will tell you what filing status, how many withholdings (usually 0 or 1) and if you should request an extra specific dollar amount to be withheld. It’s important to note that the IRS expects you to withhold around 90% of your tax due (although this tax season has been different) or face a penalty. To ensure you’re on the right path, it may be smart to do another check-up around November to make sure you’re on track.

 Once you have given the IRS calculator’s recommendations to your employer’s payroll team, you will most likely have a new take home pay amount. From here, you’ll be able to use your new combined take home pay to determine your monthly budget.

 As newlyweds, approaching budgeting will be a little different than when you were single. For many people, merging finances after being previously financially independent can cause uneasiness. I recommend creating one family budget – this includes housing, groceries, and, most importantly, joint social expenses (evenings out, travel, etc.). To help manage these expenses create a joint cash and credit account, so both partners can see how the family budget is doing. Split the total expected expense in an amount that seems fair relative to each spouse’s income. Many payroll departments allow you to deposit a portion of income into more than one bank account, which makes things a lot simpler.

 The balance of your paycheck remains yours to spend or save – and hopefully surprise your spouse with something nice every once and awhile. Overtime, many couples further consolidate their finances, but the above is a good way to begin your life together.

 Finally, don’t forget to compare your respective employee benefit plans. Update any beneficiary information on your retirement plans (don’t stop maxing out those contributions!) and determine who has the best health coverage. Do not just look at the per paycheck cost, but rather weigh the different deductibles, health network type (HMO, PPO, etc.), and total coverage. I won’t lie – it can be very confusing, but your human resources representative or current insurance carrier’s customer service are highly trained in describing each policy’s features.

 Just remember, financial planning at the start of your marriage will ensure a strong foundation for the future.

(Information contained herein is for informational purposes only and should not be considered investment advice or recommendations. Advice may only be provided after entering into an advisory agreement with an Advisor.)

Alex Graham is a Principal at Graham Capital Wealth Management, a registered Investment Advisor located on K Street. Reach him at 202-780-7726 or Alex.Graham@grahamcapitalwealth.com.

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