Getting Married? Financial Chores to Complete When You Tie the Knot

marriedThe wedding season typically peaks in late summer and early fall, according to the wedding website TheKnot.com. This year, that peak may be even more noticeable due to the pent-up demand for wedding festivities caused by the COVID-19 pandemic.

Last year, because of health concerns and restrictions on in-person events across the country, many people postponed their nuptials — or at least their receptions. Now, as vaccination rates rise and restrictions are lifted, the wedding industry expects to see a temporary boost in revenue. Here’s the story, along with some financial advice for couples who tie the knot in 2021.

How Much Does It Cost to Tie the Knot?

The average cost of a wedding — including the ceremony and reception but excluding the engagement ring and honeymoon — was about $19,000 in 2020, down significantly from the average of $28,000 in 2019, according to The Real Weddings Study 2020 [COVID-19 Edition]. The pandemic has temporarily reduced the average cost, largely because the average number of guests fell dramatically last year.

However, the average cost per guest increased from $214 in 2019 to $244 in 2020. This change is partially explained by spending on health and safety items, such as hand sanitizer and masks for guests. In addition, many reception-related costs — such as flowers, wedding attire, and venue rental — are fixed. Dividing fixed expenses over a smaller headcount increases the average cost per guest.

The drop in average wedding cost seems to be only temporary, according to the survey. The average cost for a wedding reception in 2021 is expected to be roughly $22,500. This is on par with the average cost for a reception in 2019 ($23,000).

Costs vary significantly by geographic location, however. The most expensive state to get married in is New Jersey, where couples spend an average of $53,400 for a wedding and reception. The least expensive state is Utah, where the average cost is only $19,700.

Recent Survey

Approximately 40%of engaged couples who had set a 2020 wedding date prior to the pandemic followed through with both their ceremony and reception last year, according to The Real Weddings Study 2020 [COVID-19 Edition], a recent survey of more than 7,600 couples from TheKnot.com. Significantly fewer couples (7%) still tied the knot but canceled their receptions.

Many of those who followed through with their receptions scaled them back and focused more on the health and safety of their guests than in previous years. Average guest counts were down roughly 50% (66 guests in 2020 vs. 131 guests in 2019). And, compared to 2019, couples tended to favor hometown weddings over destination weddings.

Some couples who simplified their dream weddings are planning a “sequel event” or first-year anniversary celebration with friends and family in 2021. So, the party may not yet be over for some newlyweds.

Plus, nearly half of couples (47%) who planned a wedding prior to the pandemic postponed their reception to a later date, with 32% still legally getting married in 2020 while 15% decided to postpone the entire wedding. The majority of those who delayed all (or part) of their festivities now have their eyes set on a date in 2021. Some engaged couples (3%) remain uncertain about their future wedding plans.

Housekeeping Chores

Whether you’re planning a wedding celebration now or later, it’s important to remember the administrative tasks to address when you say, “I do.” Many of these tasks relate to name changes. Some people choose to take on their spouse’s last name or use a hyphenated (or blended) version of both last names.

The tradition of changing names is becoming less common. Many newlyweds, including some same-sex married couples and people over 35 with established careers, are sticking with their original surnames.

If you do decide to change your name, here’s the protocol after you’re legally wed:

Visit Your Local SSA Office. Notify the Social Security Administration (SSA) after you’re married to protect Social Security benefits and credit ratings. To get a new Social Security card, you need to complete an application (available online) and provide proof of identification with your old and new names, such as a driver’s license and a marriage certificate. If you were born outside the United States, you’ll also need proof that you’re a citizen or legally in the country.

You can apply by mail or by visiting your local Social Security office. But most people apply in person because you must submit original documents or copies certified by the custodian of the record. The SSA doesn’t accept photocopies, notarized copies, or your old Social Security card as evidence of identity.

Update IRS Records. The SSA informs the IRS about name changes, and the tax agency’s records are generally updated 10 days later. If you don’t notify the SSA and file a tax return with your new married name, IRS computers won’t be able to match the new name with the Social Security number.

Spread the Word. Once your name is officially changed with the SSA, newlyweds need to share the good news with everyone else. In addition to filling out the proper forms with your employer’s human resource department, here are some other records to update to avoid confusion:

  • Driver’s license,
  • Passport,
  • State and local tax records,
  • Voter registration,
  • Vehicle registration,
  • Property titles,
  • Utility records, such as phone, cell phone, electric, gas, water, and trash removal,
  • Bank, credit card, and brokerage accounts,
  • Pension and retirement plans,
  • Insurance policies and beneficiaries,
  • Medical, dental, and pharmacy records, and
  • Email addresses and social media accounts.

When you return to work after the honeymoon, consult your company’s human resource department to evaluate how your change in marital status affects your benefits options. You might save money by eliminating duplicate health care or life insurance coverage, for example. And don’t forget to change beneficiary designations on retirement plans and insurance policies.

Combining Your Finances

Financial matters are a leading cause of conflict for married couples, especially when you’re trying to blend two established households into one. So, it’s important to consult with your CPA and legal advisors to get a handle on your financial, tax, and estate planning strategies as a joint household.

Newlyweds need to candidly discuss such issues as how much savings and debt each partner brings to the table. Each partner’s credit rating should be disclosed to identify potential problems early in the relationship. (Ideally, these issues should be addressed before your wedding ceremony.)

You’ll also need to decide whether to combine your savings, checking, and credit card accounts. Even if you decide to maintain separate accounts, it’s often helpful to have at least one joint account to pay for shared expenses, such as the costs of a mortgage or car, rent, household expenses, and childcare.

A joint account can also help avoid trouble in case one spouse dies. When a spouse or common-law partner dies and there are separate accounts, the survivor will be excluded from the other separate account if the estate goes into probate. That could take months.

In addition, CPAs often help newlyweds establish joint financial goals, including annual budgets and contingency plans in case a spouse gets laid off or becomes disabled. Once your short-term goals are set, look to the future: What age do you expect to retire? Where would you like to live when you retire? What activities — such as hobbies, travel, part-time work, and volunteerism — do you envision participating in during your golden years? Are your current retirement account savings and contributions sufficient to achieve those goals?

Managing Legal Matters

From a legal perspective, you’ll need to update deeds, wills, and power of attorney documents. Your attorney can also discuss the full array of estate planning tools, such as various trusts, that might be relevant now that you’re married.

People who have been previously married bring additional financial issues to the table, especially if they have children from a previous marriage or are required to pay alimony, child support, or insurance premiums under the terms of a divorce settlement agreement. Meet with your attorney to address these issues when blending your finances:

  • Do you have business debts or obligations with your former spouse?
  • Are you required to keep a former spouse on your insurance?
  • Does a former spouse have a claim on your employer-sponsored retirement?
  • If you’re entitled to assets from a former spouse, for example, an inheritance or other financial interest, will your remarriage end that entitlement?
  • Is your former spouse still a beneficiary in your will?

We Can Help

Whether it’s your first time down the aisle — or your fifth — marriage is a celebration. Don’t let administrative chores prevent you from living happily ever after. We can help address critical housekeeping chores head-on.