Newly married couple, what would be on your financial to do list?

[sportsdoc12]

Hello,

I am recently married and want to make sure that we are getting our financial ducks in a row. Im a PGY 5 ortho resident wife is a NP. I have own occ disability insurance set up through one of the big 5. We both have Roth IRA we will hopefully be able to max this year. We both also contribute to 401k some albeit not maxed out.

We will be combining our finances probably right after tax day. I also really want to work on a budget and use it as a couple once we combine finances as neither of us are budgeters currently. We have a small emergency fund that I hope to pad some throughout the following year. What other financial things should I be thinking about as a newly married couple?

Thanks!

[Tim]

https://www.whitecoatinvestor.com/fi...nd-attendings/
Figure out you spending/saving priorities.
Gross-taxes-20% retirement =spending
Make at a minimum a top side annual budget/plan from gross down to major categories. Soo many things are family decisions like housing, transportation, etc and this will allow both to agree to the longer term goals.
Rent for 2 years and consider you may want to do Roth conversions of pretax accounts in the transition year.
Are you doing a fellowship and where? You need an EFund to carry you through the fellowship/transition.

[Dewangski1]

#1 most important thing to do is to have a financial conversation, align on what you want to achieve with money (today and in the future), and then put a plan in place that will get you there and stick to it. If you find that you can’t stick to the plan, rinse and repeat.

[StarTrekDoc]

Even a simple budget is fine; but need to have one.

Read WCI book and POF 4 doc primer ; Determine your retirement goals NOW and then you can develop a savings plan and budget from that.

Or just KIS : save 20% monthly of all earnings right off the top. Pay your taxes. Fund your retirement plan. Pay your bills and the rest is funny money.

[billy]

#1- make sure your financial goals align. 20% saved pretax is mandatory, but also- do you both like material things, or experiences (travel), or would you rather super save to FIRE, etc should all be discussed.

#2- decide if all money is joint money or if you want to split a certain percentage of each persons paycheck to have as their own (my wife and I used to do 50/50, but we made enough to cover everything else, otherwise it wouldve been 10-25%) to spend as they wish without consulting the other. Helps avoid any "asking" for big ticket items that the other person would get upset about. Others want 100% of everything in the same account.

[Tim]

#1- make sure your financial goals align. 20% saved pretax is mandatory, but also- do you both like material things, or experiences (travel), or would you rather super save to FIRE, etc should all be discussed.

#2- decide if all money is joint money or if you want to split a certain percentage of each persons paycheck to have as their own (my wife and I used to do 50/50, but we made enough to cover everything else, otherwise it wouldve been 10-25%) to spend as they wish without consulting the other. Helps avoid any "asking" for big ticket items that the other person would get upset about. Others want 100% of everything in the same account.

The last thing you want is for one to feel they do not have the authority to spend money that is needed, seeking permission. You also don't want one to feel free to spend everything. Much of that depends on the individual. My spouse was extremely forceful in stating she was going to payoff her car loans out of her paychecks when we got married. After a few months, it made zero sense. I paid them off without permission. I asked for forgiveness later. No problem. Find your own mutual comfort level. It can be amounts, type or whatever. Something as small as "spending on lunch" can make mushroom into discussions. Having open communications on finances is the best choice before the spending occurs. Bad vibes is second guessing happens.

[Nysoz]

It’s nice when financial goals align but not always the case. My wife is a spender and I’m a saver. What is important is to have the discussion and come up with a plan that both people can agree to and not resent later.

Does your wife need disability insurance? Do you both have life insurance?

[sportsdoc12]

Lots of good advice here. Last year I did take her out to a nice dinner and we talked about finances. We also did a net worth statement and set some goals for the new year. II am still working into fully aligning our goals. At times she isn't fully bought into the saving 20 percent rule as she feels that she may never get to spend it if it is earmarked for retirement. I find the topic enjoyable and if anyone has any ideas on how to get someone her interested in it I would love the advice. I am more in the save more now work less later group. I think we are doing decent for starting out but we could definitely be doing better.

Also how do you guys choose to calculate how much you are saving in a year? I have a rough idea but when you have some going into ROTH and some going into 401k it makes it really challenging.

[billy]

Lots of good advice here. Last year I did take her out to a nice dinner and we talked about finances. We also did a net worth statement and set some goals for the new year. II am still working into fully aligning our goals. At times she isn't fully bought into the saving 20 percent rule as she feels that she may never get to spend it if it is earmarked for retirement. I find the topic enjoyable and if anyone has any ideas on how to get someone her interested in it I would love the advice. I am more in the save more now work less later group. I think we are doing decent for starting out but we could definitely be doing better.

Also how do you guys choose to calculate how much you are saving in a year? I have a rough idea but when you have some going into ROTH and some going into 401k it makes it really challenging.

20% gross (going by rule of thumb here for doctors, I've saved up to 40% gross some years). For simplicity sake lets say you make 200,000 that's 40k /year.

1- 401k up to including match (so 19,500). Now you have to 21,500 left to save
2- backdoor roth IRA x2 (12000)- now 9500 left to save
3- any other tax advantaged space- HSA, 403b, governmental 457? put in there. if not-
4- taxable brokerage account- I'd invest monthly so 9500/12= 792/month, in low cost index funds (vtsax anyone?)

This assumed only 1 401k, you guys may have access to 2 or none. Adjust above accordingly, but basically the order generally is : 401k for full match, then roth, then rest of 401k, then other tax advantaged space, then taxable account.

Once youre an ortho attending, if you cant save 20% gross, you have a spending problem.

[VentAlarm]

Let me save you a bunch of fights:

1) She (and probably you) need an allowance to spend on whatever she wants. When I was first married, my wife (a teacher at the time) would come home from target and I would be like “why the heck did you spend $15 on a scarf, you have two boxes of them???” It wasn’t worth the fight. We had the money between my resident salary and her teacher salary, but we were trying to pay off loans quickly. We agreed on $100/mo for both of us. She usually spent hers, I usually spent less.

2) Groceries cost more than you think.

Make a high level budget. If you’re the one on this forum, you’re probably more interested. I would gather all your numbers - gross pay, net pay, all assets, all debts. I would run out a couple loan payments off schedules and a couple mortgage amortization tables. This can give you a general view of what you can do. Mental accounting can hurt you badly. It’s easy to think “my wife makes 110 and I make 60, we should be able to afford this” when it actually doesn’t fit in your budget.

As a soon-to-be orthopedic attending and NP, you should be able to buy just about anything - nice house, nice cars, nice vacations - you just need to figure out some guard rails. If you’re purposeful with your money, you will crush any goals you have. Don’t take on any new debt. If I was in your shoes, I would start saving to build up an emergency fund, house downpayment and pay off any loans you have, but don’t buy until you’ve been an attending for 12-24 months.

[VentAlarm]

Lots of good advice here. Last year I did take her out to a nice dinner and we talked about finances. We also did a net worth statement and set some goals for the new year. II am still working into fully aligning our goals. At times she isn't fully bought into the saving 20 percent rule as she feels that she may never get to spend it if it is earmarked for retirement. I find the topic enjoyable and if anyone has any ideas on how to get someone her interested in it I would love the advice. I am more in the save more now work less later group. I think we are doing decent for starting out but we could definitely be doing better.

Also how do you guys choose to calculate how much you are saving in a year? I have a rough idea but when you have some going into ROTH and some going into 401k it makes it really challenging.

We didn’t save for retirement at all in training - just put it all towards loans. Don’t sweat the exact number now - you’re about to 10x your retirement savings, what you’re doing right now is building the muscle.

The 20% isnt really negotiable. And that would give me pause. As an orthopod, you’ll be making, what, 450-650? She can make 75-150 depending on field and how much she wants to work. What is she worried she can’t buy with 80% of 525 to 800? That buys you a million dollar house, driving whatever you want and going overseas whenever you want? You’ll make so much that you can make several mistakes, just not all of them.

Hang out with internists and lawyers, you’ll feel rich, just don’t hang out with neurosurgeons married to financial advisors. You can have a $1.2M house and a Mercedes, just don’t buy a $2M house and a Maserati.

[uksho]

As an orthopod, you’ll be making, what, 450-650?.

In my neck of woods, that’s the salary of academic orthopods. In pvt practices, they all make much more , close to a million . Any Orthopods, Please correct me if I am wrong .

To OP, you got good advice , with high paying job and second salary , probably you can spend a lot and save a lot.

just don’t spend it all . If I were you , even with nice house and car, can save 50 percent ( unless you are in California ). All the best .

[VentAlarm]

In my neck of woods, that’s the salary of academic orthopods. In pvt practices, they all make much more , close to a million . Any Orthopods, Please correct me if I am wrong .

To OP, you got good advice , with high paying job and second salary , probably you can spend a lot and save a lot.

just don’t spend it all . If I were you , even with nice house and car, can save 50 percent ( unless you are in California ). All the best .

I’m in the wrong specialty…..

[uksho]

I’m in the wrong specialty…..

So am I . 😀

[Otolith]

Just sit down and make your goals together:
1. How much to save for retirement
2. How much of Emergency fund
3. How much to save for new car(s) cash purchase
4. How much to save for vacations
5. How much to save for down payment
6. How fast to pay off student loans

You can prioritize and say we will do #2 then once thats done that money goes towards #4...

Then have automatic withdrawal from your paychecks so you never see this money. Then base your budget off this that is left. We never really budgeted beyond this. We each kind of know we can spend 100-200$ month no questions asked. Anything purchased for ourselves larger than 200$ we check in and have brief convo. If you are meeting your savings goals you made together and never see that money I don't think you will have many arguments...

Long winded way of saying reverse budgeting is my vote!