How to start married life with extra cash
Weddings often leave couples with more than just memories, and many use credit cards and other forms of borrowing to cover the full bill.
Once you’ve said “I do,” though, you have access to insurance discounts, tax benefits and other ways to cut costs. Here are some tips:
Refinance your student loans: You can save money on student loan bills if you’re a good candidate for student loan refinancing. Generally, you’ll need a credit score of at least 690, and your annual income should exceed your total loan balance. Married couples can refinance through Purefy, a lender that rolls spouses’ student loan debt into one monthly payment. The company will base your interest rate on the higher of your two credit scores, which could get you a better deal than if you refinanced on your own.
You’ll lose access to federal income-driven repayment plans and forgiveness programs for public service workers if you refinance federal student loans. So familiarize yourself with the pros and cons of refinancing before moving forward.
Grab insurance discounts: You might get a discount on your car insurance premiums merely because you’re married, which some companies believe means you’re less risky to insure. Liberty Mutual offers a “newly married discount” on car insurance, and State Farm says married men under age 25 may see a drop in their premiums. Combining your policies also could save you money, unless one partner has a bad driving record or poor credit.
Other types of insurance may offer discounts for married couples, too. And you and your spouse can sign up for the cheaper of your two employer-based health insurance options.
Consider staying on the family cellphone plan: If you think adulthood means finally ditching the cellphone plan you’ve shared with your parents and siblings for years, think again. Each member of a four-person family plan saves $180 to $300 a year compared with what they’d pay for an individual plan, a NerdWallet analysis found. Even starting a new account with a spouse could cost more if you have fewer people contributing to the bill.
File taxes jointly to lower your tax bill — most of the time: In most cases, you’ll save money if you choose the tax filing status “married filing jointly” instead of “married filing separately,” says Dave Burton, a New York certified public accountant. Joint filers have a higher income limit for many tax deductions and credits. If both you and your spouse are high earners, though, a larger share of your incomes could fall into higher tax brackets, Burton says, leading to a higher tax bill.
You may want to file separately if you’re on an income-driven student loan repayment plan, says Hui-chin Chen, co-owner of Pavlov Financial Planning in Arlington, Va. Filing jointly means the government will take your combined income into account when it calculates your monthly loan payment. If your spouse is a high earner, your payment could jump.
Maximize credit card rewards: Combining finances means more opportunities to save money with credit card rewards, as long as you’re committed to paying your bill on time and in full every month. Carrying a credit card balance accrues interest charges and diminishes the value of your rewards. Plus, your credit score could take a hit if you’re using 30% or more of your available credit each month.
If your spouse has no or very little credit history, he or she can build credit if your card reports authorized users’ activity to the credit bureaus. But the cardholder, not the authorized user, is ultimately responsible for the bill. Talk about your purchases and financial goals regularly so your credit card bill — and money in general — isn’t a stressor from the start.
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Brianna McGurran is a staff writer at NerdWallet, a personal finance website.
