Financial Planning for Newlyweds

Welcome to EWA’s FinLit podcast. EWA is a fee only RIA based out of Pittsburgh, Pennsylvania. We hope all listeners of this podcast will benefit as we deep dive into complex financial topics that we will make simplified for you. And we hope that this really serves as a catalyst so that you can make the best financial planning decisions for your family and also save time. Welcome everyone to FinLit by Ewa on today’s podcast, joined here by Devin, one of our new advisors here at EWA and really excited to talk about financial planning for newlyweds. So, Devin, I know there’s probably, you know, within the audience a lot of newly married couples have not had these conversations yet. A lot of married couples that have been married for 10, even 20 years probably have not had these conversations.
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Speaker 1
00:54
But give us the what’s the number one piece of advice when you’re combining finances?
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Speaker 2
01:00
Yeah, the number one piece of advice is to communicate the big C. You’re right. I don’t think, I don’t know what the percentage is. I don’t have any stats in front of me, but I would, you know, in my experience, both professionally and personally, it’s a very low percentage of people that have these conversations before they get married, let alone after. Or I should say opposite, after they get married, let alone before. And it’s very important. Just sit down and have the conversation. That’s the number one piece of advice.
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Speaker 1
01:24
What does the conversation typically entail? If you were doing, if you were running this, if you were getting married, you’re already married and have three kids. But if you were just put yourself in the position, what would be the first, what would be the outline of discussion?
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Speaker 2
01:38
Yeah, I call it the Money vision. We call it the Money vision. Set a, set a North Star for where you want to be as a couple as it pertains to your finances. And then everything kind of follows from there and we’ll get into it, I think kind of step by step or point by point. But what that means is to go over your goals, your dreams, your fears, your worries about money, maybe some habits in the past and just set kind of expectations and set a plan with your partner.
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Speaker 1
02:08
Yeah, absolutely. Couldn’t agree more. So some examples I think would be, you know, the big ones just from like short term, midterm and long term. It’s like really how we like to break it down. So short term, I would say one to five years, we’d want to break that down professionally, personally and financially. And because everything obviously Correlates together when it comes to finances. So, you know, essentially fast forward, put ourselves in a time machine five years. What would we, what would need have happened for us to have no regret, for us to feel like we’re on track for our goals? Right. So professionally, typically here, what position you want to be in or do you want to start your own business? What. And then what income do you want to be at personally?
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Speaker 1
02:57
Would be, you know, what kind of house we want to live in, what kind of lifestyle want to live in, where are we traveling to financially? It may be how much we have saved or what our savings rate is out of, student loan debt, etc. But any other examples you can think of in the short term? Common stuff you see?
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Speaker 2
03:14
Yeah, things like buying a house, having kids, careers, paying off debt. I mean, you know, the examples are myriad. But you know, I think the key is to just get it out on the table. Right. I don’t know if they have to be, I don’t know if they have to be all that realistic. Right. You can, you can talk about your dreams and what you want in that short term period, but the key is to kind of get it out all on the table so that you can kind of put them together and then I guess discuss what’s good, what’s bad, what works for you, what doesn’t work for you.
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Speaker 1
03:46
Yeah.
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Speaker 2
03:46
And then, and then we’ll do this again for medium and long term things. But that’s the idea, I think.
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Speaker 1
03:50
Yeah. So midterm, I mean, the common stuff I would see would be college planning. If you’re newly married, you probably don’t have kids yet. But it’s something you should discuss like what’s the philosophy? Because bringing a kid in the world, a lot of people that could we. I see typically it’s the opposite. The people that could have really financially afford to have kids typically don’t have kids. And the people that can afford it typically have all the kids in the world, but it’s expensive. So you know, what do you, how, what kind of impact does that have on your financial plan? And the big one is college. Like is that our.
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Speaker 1
04:25
Philosophically, did your parents pay for college, put it all on the table, you know, how much skin do we want to have kids, future kids have in the game, do we want to fully fund it, etc. Etc. And then I think the big one would be if we have kids, is someone going to stay at home? And how does that affect the financial plan, having that and the reason why you’d want to have these conversations in our opinion, you know, up front and set that money vision is because things are going to be. You set the tone for yourself for the rest of your life.
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Speaker 1
04:59
So if you become accustomed to a certain lifestyle and then your income drops in half because you have a kid and one of you staying home, we pretty much set ourselves up from financial failure at that point. But if you’ve set a huge savings rate up front, knock out school loans, get ready, this can really be step stone into that future smoothly. Yep. So what would be the like the biggest thing you would say long term.
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Speaker 2
05:26
The easy one is retirement, AKA financial independence. What does that look like for us? Again the range is pretty wide but everybody there’s, you know, it starts with people that love their jobs and never want to retire and goes to people that absolutely hate their jobs and want to retire as soon as possible. And again it’s about just talking it through and getting on some sort of same page. You don’t have to say this is the plan today and for the next 30 years, but just get it out there right with your partner and so talk about what does, you know, what is, what does a retired life look like for us potentially.
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Speaker 1
05:57
Yeah. And I see like typically the deeper the conversations can have really impacting in every decision making in your life. So for example, I’d say the average that we see in America is like you haven’t talked about retirement. So it’s just like complaining about how much like the job is horrible. It’s like I want to retire on a retire when I retire and then it’s like whatever will retire away from something, not retiring. Well say you know what, I really do enjoy certain aspects of my life. My intellectual capacity is on the girl is like maybe I don’t want to retire but maybe I want to have these bigger financial experiences and the feeling of financial independence earlier on but have the flexibility knowing I’m still going to work as long as I can health wise.
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Speaker 1
06:38
And that kind of, that makes much bigger instead of like putting you know, your head down and grinding and being miserable for 20 or 30 years and then waking up and retiring but then not having any, you know, close friend group or close hobbies or things that you can retire like looking forward to it just kind of like misery leads to misery versus you know, really designing life today. What’s our best life today and how do we keep that going in the future? It’s a huge difference. And these conversations, if you don’t have these conversations. Just, you’re gonna. Someone else is going to make all your decisions for you in the re. In the reality, whether that’s your job or your, you know, it’s just how things work. If you call the shots.
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Speaker 1
07:17
If you don’t, someone else will call the shots for you. So, okay, the second thing you have on here is your understanding, your cash flow. So what do you mean by that?
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Speaker 2
07:27
That is money coming in and money going out. So income and expenses. You think that would be pretty straightforward for most people, but for a lot of people, that is, they don’t know how much they make. And a huge percentage of people don’t know how much they spend. So just sit down and do a quick, I don’t like to use the B word, budget, but do a quick cash flow analysis of where’s the money coming from and where’s it going. It’s as simple as that. A couple of reasons why that’s important. I think, number one, it just shines a flashlight, shines a light on where the money is going. A lot of people, again, like I said, don’t know.
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Speaker 2
07:58
And then what that allows you to do is say, you know what, too much is going to place A, we would rather have it go to place B, or vice versa. Not enough is going to place C, let’s put it into place D. So the idea is figuring out where money is going now, but then also at the same time talking about what you value and what you would love to spend money on and kind of allowing that money to flow to those things that you do value.
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Speaker 1
08:20
And so we recommend a system called reverse budgeting. And this is like, I find, you know, we meet with like an accountant or engineer. Like, they have every like, cent pretty much itemized of like, what went out the door. But my question is, like, what good is that done? Like, the only thing that matters is ultimately, did you enjoy that? And then are you setting yourself up for financial success? So reverse budgeting, I use the analogy really simple. Like 10 years ago I was, and I’ve told this story a hundred times, existing clients, but I was struggling with like, my morning routine. And so I had a coach that helped me at the time. It all starts with, you know, not hitting your snooze button in the morning because I would, you know, 5:30, hit snooze.
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Speaker 1
09:01
And then suddenly at 6:15, I’m scrambling, I’m, you know, showering, going straight to Work I’m missing my workout, you know, all the reading I want to do, like reviewing goals, all that kind of stuff. So what happened was, you know, she recommended I, at that time I had an actual coffee pot. This is before Keurigs existed. And so she’s like, program it for 5:35, leave it the coffee maker off the coffee pot. And so if you don’t get out of bed at 5:30 and make it downstairs at the time the coffee’s going to start at 5:35 it’s going to spill everywhere. And believe it or not, every day, that was it. I was jumped out of bed, no alarm. And then I would start them. So I recommend like set up that coffee pot system for your finances through a budgeting system.
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Speaker 1
09:43
It doesn’t make any sense to track where money’s going. Just set guardrails where you can’t over, you know, you have to stay within those guardrails. So simply put, your paycheck comes in. Let’s say, you know, you’re new and married, you’re young, it’s 10,000amonth, 5,000amonth, 20,000 doesn’t matter. The same concept your paycheck. You direct your HR to go to two accounts. One checking account is for fixed expenses and fixed savings and one account is for variable cost. So when everything comes into one account, the snooze button occurs. You start swiping your cards. Then suddenly the rent or mortgage payment comes out. Before you know, end of the month, you’re like out of money. It’s like, where did it all go?
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Speaker 1
10:25
Well, if you remove the decision fatigue by putting all of your automated stuff like your mortgage, your student loans, your car payments, utilities, if they’re on budget, all the fixed stuff, maybe that’s 5,000amonth. It goes in, it goes out. You don’t have to worry about that, you don’t have touch it. And then all you have to do is stick within the guardrails of what’s meant to be spent is in that variable account. And if we structure in the fixed account that the savings for short term, you know, building an emergency fund, maybe, you know, you’re saving a down payment, whatever it is, it all is automated out of that fixed account. And obviously your 401ks are hitting before you even get the money into your checking accounts. This is one decision that’s going to eliminate thousands of bad decisions. So remove decision fatigue.
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Speaker 1
11:13
It sets up that coffee pot mechanism and it’s accountability. It’s tough at first, but we’re we have humans, like, we have money temperature. Just like we like, if you like to sleep with 70 degrees, it goes to 75. You’re not going to sleep well at night. If it goes to 65, you have to be within that temperature. We have a money temperature, I believe. And everyone, if you control that, you’re going to stick pretty close to that. And if it doesn’t get discussed, the money temperature will control you.
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Speaker 1
11:42
And this is why we see so commonly, like, residents go from making 50,000, somehow being okay living their life and then making, you know, 200 or half a million or even a million as attending doctors, and they have all their money’s going out the door suddenly, and now they’re more stressed than ever, even though their income is 20 times higher than it used to be. And this is because the money temperature will control you if you don’t control it. And the best mechanism to control it is sit down as a couple, have a discussion on lifestyle, and put those guardrails in place by putting that coffee pot in place and. And do a reverse budget. So, yep, all right, that’s cash flow. So let’s talk about balance sheet. So new a couple is getting married.
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Speaker 1
12:22
They bringing assets into because more and more common people are getting married. I don’t know, Stats, but I got married pretty young, but like, I got.
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Speaker 2
12:30
Married at 33, so.
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Speaker 1
12:32
Oh, okay, there you go.
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Speaker 2
12:33
Yeah, I mean, you know, I think it’s pretty common in the developed world that people are getting married later and having kids later and later, so.
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Speaker 1
12:39
Right.
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Speaker 2
12:40
I think, you know, the average age is probably in the mid-30s now, something like that.
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Speaker 1
12:43
Okay, perfect. So.
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Speaker 2
12:47
Point being, people are coming into the relationship, the marriage, with established, significant assets.
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Speaker 1
12:51
All right.
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Speaker 2
12:52
Most of the time.
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Speaker 1
12:52
So give an example of that. And then how would you recommend to, you know, let’s say they are married. Prenup. That’s probably a whole. We’ve. We’ve already done a podcast on that. And the importance of having the discussion then potentially actually implementing a prenup, philosophically, if you’re aligned with that. But let’s say, you know, you don’t have it. Wished you a happy marriage, but now we’re just talking through the balance sheet. How would you recommend to go about that?
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Speaker 2
13:18
Yeah, so the balance sheet, AKA your net worth, it’s as simple as what do you own and what do you owe. Right. So just sit down and make a list on the back of a napkin if you. If you need to or have to, what are. What are our assets and what are our liabilities. So what are our investments? You know, 401ks, other retirement plans, IRAs, brokerage accounts, checking accounts, savings accounts, private investments, real estate, your primary home, all of those things. And then what do you owe? That’s your debt, you know, student loans, credit card, car, things like that. Get it all on. And again, you’d be surprised. A lot of couples do not do this until it’s quote unquote too late. So I don’t want to sound facetious, but I don’t want to make it sound too simple.
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Speaker 2
14:01
But this is something that a lot of couples don’t do. Get it on a paper. And just so you know, you’d be surprised how many couples I’ve talked to. Maybe you have as well. Ten years into the marriage, you had one partner had no idea, the other partner had all this debt, no idea, or they had mental property. Both sides of the balance sheet. Right. I mean, you’ve seen it a million times. So again, the key is to communicate. So get it out all in the open and talk about if there’s some issues in the balance sheet. Talk about how we solve them. If there are good things with, you know, ideally you’ve got assets that are growing. How are we going to manage those assets?
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Speaker 1
14:31
So, yeah, and this isn’t a plug for us at all. But like, this is much simpler if you work with a financial advisor to do this because they can really orchestrate that conversation smoothly versus it being like. Because money is very stressful. If you haven’t had these conversations and you’re in a happy marriage, you know, why take that risk? I’d recommend definitely work with the financial advice, a professional and guide through these conversations. Yeah, get it all out there. Get your net worth. I think net worth tracking where your money spending is stupid, in my opinion. Do it once. I mean, that’s really smart. Just make one decision. Reverse budget, calibrate it, control the temperature. It’s going to be tough. It’s like going to a gym. Like you’re forcing yourself to go to the gym. It’s going to be tough.
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Speaker 1
15:17
You got to make meaningful changes. But if you’re forced, you’re basically forcing yourself to make healthy habits on a daily, you know, monthly basis. But then as far as what you track, the balance sheet is extremely important. Net worth is extremely important. If I were to track one thing once a month, that would be it. Because if the net worth is growing, you know, your behaviors, you know your behavior is off, and if it’s growing too much, you know, well, maybe you need to chill out and enjoy life a little bit today. So it’s a high level thing that can show you a lot, you know, of a huge X ray into your decision making. So, okay, how would you suggest going about combining finances or maybe not combining finances from like a monthly paycheck perspective?
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Speaker 2
16:00
Yeah, this is a big one and it kind of goes along with the cash flow. But you’re, you’re in a relationship, you’re probably living together, and at the very least you’re sharing some expenses, right? So you got to figure out how are we paying for this, right? There’s kind of the classic, there’s kind of. I see, I look at it as three ways to combine finances or not. So you can either do just everything is combined, right? And one checking account, one savings account. There’s really no separation. You can go everything separate, right? You have your investment accounts, you have your checking accounts, you have your savings accounts, and so do I. Right. Everything’s separate.
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Speaker 2
16:40
And then what I am seeing is more and more common these days is kind of a yours, mine and ours model where maybe part of my paycheck goes into my checking account. Part of your paycheck goes into your checking account. We spend that how we want with no requirements to get permission on spending out of those accounts. But then there’s a shared account for shared expenses, you know, the mortgage, you know, kids, school payments, food, whatever that is more and more common. And I would maybe argue that’s a very effective model rather than, you know, totally separate or totally combined, especially with people in their kind of younger years, you know, 30s, 40s, 50s. Right. So, yeah, I agree.
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Speaker 1
17:17
I think that’s the most effective model. I think, you know, if you’re, why are you married if you’re not able to have transparency and join some finances. But having some autonomy is also important. So I, I really like the, you know, you’ve got a joint account which takes care of all your fixed expenses, all the big ticket items, you know, so, and this is important too. Like let’s say someone’s making 400 grand, someone’s making 100 grand, big income difference. And we see this, unfortunately, a lot of power dynamics when money comes into play in relationships. And just to remove all that get on the same page, you know, maybe the person making 400 grand, probably clearing quick math, maybe 18,000amonth after taxes and 401k.
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Speaker 1
17:55
So maybe that out of that 18, like 12,000 is going to the joint Account maybe the person making 100 is clearing 5,000amonth after contributing a lot into their 401. So we’ve got 12 and 5, we’ve got 17. So example of that 17 or let’s say the 5, the 3 of the 5 is going in. So 12 plus 3. So it’s 15 in the joint account that’s covering the mortgage, it’s covering car payments, it’s covering student loans, it’s covering our savings. So building an emergency funding 529 for kids, funding, you know, a brokerage account for long term flexibility that you have access to before your, you know, your 401k is at 59 and a half. So that’s it. And then the person making 100 still has 2000amonth to go, you know, dine out, travel, buy gifts.
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Speaker 1
18:39
And the other person may, the hiring has, maybe they’re covering more of the variable spendings like the grocery bills, etc. But that would be a perfect setup where you have a mix of autonomy plus all your big ticket items which is going to drive your future together forward is taken care of there. But that meant to be spent account with no issue. And usually it’s better to have some autonomy and have that separated in my experience now philosophically, religiously, people could agree or disagree on this. I’m just saying like if you were to say like how would you do it? If you want the highest chance of financial success, happiness in the relationship and you know, reaching future goals, that would be it. Reverse budget.
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Speaker 1
19:18
And as a couple, checking account one for spouse one, joint account for both of you, checking account two for spouse two. That’s it.
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Speaker 2
19:26
Yep. Agreed.
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Speaker 1
19:27
Agreed. Okay, so let’s just rapid fire, what are some other considerations that a married couple who hasn’t done a financial plan or a newly married couple should be thinking about pretty much off the get go?
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Speaker 2
19:40
Yeah, there’s a handful and I think each of these could be their own podcast episode in and of itself, but real, you know, fairly quickly. So creating a state plan, that’s wills, powers of attorney and healthcare proxies, that’s very important.
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Speaker 1
19:52
I’m gonna just hit on those real quick. So, power of attorneys, if one of us gets in a car wreck, the other person, you know, typically you name a spouse as your power of attorney, who’s making financial decisions on your behalf. If you can’t, who’s making healthcare decision behalf, who’s making general decisions. So typically you’ll want financial health care durable, which kind of covers Everything else. And then the estate plan. I mean, typically, if your net worth is decent or high, people think about a will even more important than a will. If you want things to go privately, you need a revocable trust. You can avoid probate that way. Direct beneficiaries on accounts can also avoid probate. But you’re not thinking about, you know, what happens if we both get in a car wreck, or we’re not thinking about that.
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Speaker 1
20:34
But really important, because this is a one document that kind of takes care of all your wishes if you pass. And if you don’t have it can leave your loved ones and sometimes quite a mess if they have to go through probate on certain assets. And beneficiaries on old accounts always trump whatever your estate plan is. So once you do that estate plan, it’s really important to go back and update. Cause maybe you were married before or maybe you had a girlfriend before your current wife. Well, if you had that girlfriend listed on that old 401k, even if your will says, oh, my new wife gets everything if you die, your ex girlfriend is getting everything if that person’s still on that old 401k account.
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Speaker 1
21:13
So it’s really important to kind of do a checklist, work with a professional, and get all of this stuff updated, aligned, and structured moving forward.
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Speaker 2
21:21
Yeah, I think the fundamental question there is what happens to my assets if I were to pass? If one of us were to pass. And it’s very important. That’s kind of why that was number one there. Second one, just make sure you have proper insurance coverage. Life, disability, umbrella, liability, et cetera. That again, could be its own podcast in of itself. Any thoughts on that?
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Speaker 1
21:44
Yeah, just, I mean, real quick. I mean, life insurance, a new married couple, you’re probably looking at term life policy. Your work probably covers some of that. If you want to have future kids. Once you’ve locked this in, it’s locked in forever. So typically, it does make sense to purchase some term life insurance that is outside of your work. If you change jobs, it stays with you. Just quick rule of thumb, 10 times your income. So if you’re making $100 million term life policy, if you have kids come into the picture, we recommend doing a needs analysis. And that’s typically a life analogy. So cover liabilities, cover income replacement, cover final expenses, and cover education for your kids, if that’s what you’re planning on doing. Disability, I mean, on General, you have 60% through work.
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Speaker 1
22:23
If you’re disabled, that 60% is taxable, it pays till 65. It’s not based upon your occupation. Normally we recommend that’s your most important asset is your income. Protect the other 40% as best you can. You can’t protect the whole thing typically, but you can get a supplemental policy that’s really cheap. These are use it or lose it policies. And that’s okay because as long as you’re help, healthy, happy, kicking, I mean, you’re going to have an income paycheck. Umbrella would be, you know, the. What if someone trips on your sidewalk, you get in a car wreck and it’s. That is typically increments of a million. You want to have that rounded up bigger than your net worth of your net worth, 200 grand, you’d get a million. If you’re not worth 1.5 million, get 2 million. Typically that caps out at 5.
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Speaker 1
23:05
That is something super important. It’s super cheap. You know, we’re talking 20 bucks a month for $1 million umbrella coverage. And then, you know, the other ones would be if you renters policy, if you own, you know, homeowners insurance, etc. But those are the very basics. Insurance. It’s a necessity, necessary evil. Just be careful. You can go broke by having too much insurance. You can go broke by not having insurance. It’s about striking the balance and making sure that you have a good protection to protect your future goals. So.
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Speaker 2
23:35
Yeah, exactly. The next one’s a little touchy. Prenups and post nups. So yeah, again, you’re newly married at this point. So you either already have a prenup or lost the opportunity to get a prenup, but there is the opportunity for a post, not have you got a prenup?
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Speaker 1
23:52
Real quick, let’s hit that. You know, basically it’s a. If we don’t work out, here’s what happens to our finances. And so typically what we’d see is everything you have before is separate and then, you know, typically for the marriage. Yeah. And what I would recommend is anything you hold before the marriage or after the marriage. Anything you decide to keep an individual name is yours. Anything in joint name is split. And you could, you know, you can direct obviously like new assets. We want to go into joint name. This is important. If there’s a lot of family money one side, this could be important if there’s significant income or differences in net worth. Ultimately you’re married because you plan on staying together forever if things don’t work out. It can be very messy, especially with kids. Involved.
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Speaker 1
24:39
If you don’t have this figured out in advance. And this could be a good conversation to see true colors as well. If you maybe, you know, sometimes this has led to people saying maybe we’re not a good fit because they haven’t had the tough conversations. Everything’s hunky dory honeymoon stage. Well, the prenup will definitely bring up some touchy. It’ll, it’ll be a good test, I think, and philosophically reliant on the finances. So if we don’t have that, assuming you don’t have that, a lot of people don’t. They want to avoid that conversation. Now we’re married, now we’re like, oh geez, what happens if we don’t work out? Which 50% plus couples in America don’t work out. Post nup is a prenup. It’s a, after your marriage it’s saying okay, and in some states this is legally binding. Some it’s not. But Pennsylvania it is.
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Speaker 1
25:25
We’re recording this. Ohio, next door to us is, it is essentially if we agree to do this after marriage, then it delineates. Here’s what happens if we split and here’s where assets go, here’s what percentages go. Where. The only thing that you can’t put into postnup is with child. You can’t child so you can decide alimony, how long that lasts, that can all go into prenup or post up. But a child support, that’s going to be based upon income. You know, so if someone’s making 400, one person’s making 100, that person making 400 at the child custody is 50, 400. They’re going to be paying the ex spouse until their kids are 18. There’s a state formula.
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Speaker 1
26:04
You can go on based upon income and those tax returns get reviewed or if it’s amicable, you can work out your ex spouse. Okay, let’s just set it this amount and let’s not have to over communicate. Let’s start a separate lives and really keep the best interest of work. This isn’t a podcast in divorce, but keep the best interest. I’ve had experience with this. That’s why I’m rambling on. You know, just keep the best interest of your child involved and both spouses agree on that. Then you can stay out of court and just communicate and be fine. It’s pretty simple as that. Harder to do than, you know, easy to say, harder to do, but experience with that and highly recommend trying to stay out of court if you can. The attorneys will win, you will lose, children will lose.
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Speaker 1
26:40
Just stay out of court, be amicable. Okay.
S
Speaker 2
26:43
And I think that’s what the postnup and the prenups are for, right? To avoid those catastrophic situations. Whenever the relation, if and when the relationship does dissolve.
S
Speaker 1
26:52
Yeah, if there’s no kids involved, boom. If you have a prenup post up, it’s pretty much done. You can try to fight it. It’s pretty much going to be binding. Kids involved, that’s where the prenup or post up again, those two things, child support, child custody, those can get reviewed ongoing basis. So, all right, so you have tax situation. So tell us about this. There’s obviously two different tax brackets between single and married. Married is obviously better than single. Being single in America is punitive from a tax perspective. We’ve done podcasts on that. But really important to do a tax analysis and update your HR and make sure the right withholding. So you may be over withholding as a single person. You may be under withholding. Worst case scenario, most people can’t afford a huge tax surprise at the end of the year.
S
Speaker 1
27:38
So what’s the form that you would update?
S
Speaker 2
27:41
Well, if you have a kind of a typical W2 job, you would call your HR and, or log onto your portal and update the W4. Just update your filing status there should be pretty easy. Again, like you mentioned, the purpose behind this is just to make sure that your, you know, your taxes that are being withheld, each paycheck is appropriate. Right. You don’t want to, you don’t want to overpay, you don’t want to underpay. You generally want to be pretty even at the end of the year. But this is, taxes can get very complicated very quickly. So again, another podcast in and of itself. But generally speaking, just review your tax situation like fairly quickly at a high level. You know, again, most couples file married filing jointly because it’s the most advantageous.
S
Speaker 2
28:21
But there are reasons out there, the big one being student loans, that you might want to file married filing separately or head of household or whatever the situation may be.
S
Speaker 1
28:28
Prenups, a lot of times say you married filing separately. There’s very little difference between married filing separately, married filing jointly. From a tax perspective, there’s a little bit. You may lose a couple grand if you’re high income, but it’s still going to save you a lot versus single versus two people you know not married. They’re living together, they’re single taxpayers. Unless you’re both. Your incomes are extremely high, then there’s no difference. But that’s case by case. So then last one again, not a plug is, you know, consider working with a financial advisor. If you’re in high paced, high demand jobs, time is everything. Time outside of work is what you should try for. You know, don’t work to live to work, or live whatever. I live to work. What does that, how’s that saying go? Because I don’t live by that.
S
Speaker 1
29:12
I mean I work a lot.
S
Speaker 2
29:13
Don’t live to work to live. Yeah.
S
Speaker 1
29:16
Yeah. Well, tough news if you’re a young married couple.
S
Speaker 2
29:19
Yep.
S
Speaker 1
29:20
I think that’s actually pretty bad advice. You got to go grind it out. You got it. You know, America, it can be really good to live here if you have financial success. If you’re worried more about like what you’re doing on the weekends and you’re not climbing, you know, you don’t have an income to support that, it’s going to be a really tough life. So, you know, I hate to break your dreams of like, go find what you’re passionate about, but I think you should go find what you’re really good at, you can make a ton of money at and then you know what you’re also passionate about as well. But you got to build yourself financial security in America. That’s how it works. This isn’t France or other countries where they just take, you know. Anyways.
S
Speaker 1
30:01
Well, with that’s a wrap, I think, right? Any other.
S
Speaker 2
30:05
Yeah, let me just thinking, wrapping up with one thing is that this is not meant to be super complicated or difficult, but it’s also not meant to be easy. This is an investment in your time and your emotional energy so that you can, you know, proceed along in your marriage as happily and as carefree as possible. So you get the dirty work done up front. Right. Get it all over with and then you can kind of keep crafting and building your lifestyle. And I think the Holy grail, correct me if I’m wrong, is to not really have to worry or think about this. One definition of being wealthy or rich is not ever having to think about your money. So you get it, you get all of these things, or most of them done up front.
S
Speaker 2
30:41
You do periodic reviews once a year or once a quarter, whatever, in the future just to kind of level set. But it’s an investment in your time and your energy and it should pay off in the future. Future.
S
Speaker 1
30:49
So, yeah, I think it’s all about the quote of, like, easy choices, hard life. So easy choices as a couple, like, let’s not talk about this. This is stressful. Let’s just go have fun. Well, you’re gonna have a hard life for the rest of your life because you’re not going to be philosophically aligned. You’re gonna have. And then what it’s going to lead to is just like cycled arguments that happen pretty much daily, weekly, year, whatever, or hard decisions, easy life, hard decision. Let’s have a really tough conversation now. Let’s talk about our philosophy on money, our philosophy on kids, how we grew up, what our stresses are. It’s going to bring out a lot, typically, and then that’s going to lead to an easy life. So rip the band aid off. It’s always. That’s the, that’s the analogy.
S
Speaker 1
31:36
If you rip the bandaid off, it’s, yeah, it’s hard, but it’s done. Then it’s easy. You slowly rip. If you slowly pull that thing off, it’s going to hurt continuously. And these conversations, these checklists, if you get it all done, it will lead to removing the number one stress in America, which, you know, polls have shown finances. Yep. Well, thanks for joining us, everybody, and look forward to catching you next week. Thanks for tuning in to our podcast. Hopefully you found this helpful. Really hope this is as beneficial and impactful to as many people across the nation as possible. So hit the follow button, make sure to rate the podcast and please share with any friends or family members that would also find this beneficial. Thank you very much.
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