You’ve recently tied the knot, and since then your priorities have been opening presents, writing out ‘thank you’ cards and eagerly awaiting the ping in your inbox from your wedding photographer.
With your heads in the clouds – and quite rightly so – financial planning is probably the last thing on your minds. But as you build and plan your lives together, it’s important to think about how you’re going to protect your financial futures.
What’s mine is yours
While it might not be something you want to think about as soon as the celebrations die down, it’s worth having a conversation at some point soon about life insurance. Do you already have life insurance? If either of you have plans, now might be a good time to review your cover to make sure it’s providing the right protection for your new circumstances.
For example, now that you’re married, the next big step could be to upsize before starting a family. If that’s the case, buying a bigger house will make you liable for more debt, and your policy would need to reflect that.
If you have two separate policies, combining them could save you money. However, bear in mind that one policy means one pay out; so, if you have children and something happened to both of you, they would receive a single lump sum.
If you aren’t covered
If either of you are yet to take out a policy, there’s no time like the present! It’s not a nice thing to think about, but in the event of one of your deaths, would the other be able to pay the mortgage and household bills, or cover childcare costs alone? A Life Insurance policy, for instance, will pay out a lump sum if you die within the term of the plan, and can be tailored to suit your individual needs.
Critical illness cover can relieve some of the emotional and financial burden associated with falling ill, providing you with a cash sum so you can concentrate on getting better rather than worrying about how to keep a roof over your head. Income protection, meanwhile, can help provide you with a regular income to replace some of your earnings if you can't work because of illness or injury. It’s worth noting that the younger you are when taking out cover, the cheaper your premium is likely to be.
Investing in your goals
Once your life insurance is sorted, you can start thinking about your married life – your future goals and all the exciting things you want to see, do and experience together.
Chances are you’ll have many goals; from buying a new car or growing your family, to travelling the world or retiring to the countryside. Whatever your goals may be, reaching them will largely depend on one thing: financial planning.
First things first, though. Before you start saving for something years down the line, you need to get your current finances in check. For instance, you should have an emergency fund of at least three months’ living expenses to cover life’s little mishaps. If you have any lingering debt, you might also want to focus on getting this cleared first.
Once your debt is cleared and your emergency fund is in place, you might want to start putting money aside for short-term goals such as a holiday or new furniture.
For long term goals (5+ years) – such as living your dream retirement or one day helping your children through university – you could think about investing. One way of investing is by opening a Stocks and Shares ISA which could be a great way to build your savings over time; you could benefit from tax-efficient growth with the potential for higher returns than traditional cash savings. But investing isn’t without its risks – your investment could fall, meaning you might not get back the money you put in in the first place. If you’re committed to the long term, it’s likely that your money will ride out potential bumps in the market, but nothing is guaranteed.
Building your future together starts today; and taking steps to safeguard your finances and invest in your goals will help to secure a ‘happily ever after’ for the both of you. Now, time to finish opening those prezzies…