Whose money before and after wedding?

Dear Dave,

I’m getting married this summer, and I’m on Baby Step 4 of your plan. My fiancée is getting onboard with your advice, too, and she’s currently in the process of paying down her student loan debt. Would it be a good idea to go ahead, and put most of my emergency fund savings toward helping pay off her debt now?

Aaron

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Dear Aaron,

You’ve got a generous heart, and I know you love this lady, but I wouldn’t recommend being involved in paying any of her debt until after the wedding. At that point, you two are joined together as one, and the concepts of “mine” and “hers” and “his” disappear. It all becomes “ours,” and you can adjust your money situation to reflect your marriage and your financial makeover as a couple.

Make sure that “we” have an emergency fund of at least $1,000 in the bank at that point. Then, if you’re both in agreement on the issue, you can throw the rest of what you previously had in your emergency fund at the debt. Both of you can also pile up cash between now and the big day, so that when you’re “official” you’ll have even more cash on hand.

Congratulations, and may God bless your lives together!

Dave

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Insurance coverage

Dear Dave,

My husband and I are 24, we’re debt-free, and we’re just a few weeks of saving away from having a fully funded emergency fund. Each of us has a 401(k) plan at work, and right now we’re concentrating on life insurance purchases. You always recommend term insurance, but how long should the coverage last?

Jenny

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Dear Jenny,

Congratulations on being super smart with your money! It sounds like you two are starting out on the right foot.

Generally, I recommend 15- or 20-year level term policies – unless you have children. Since you didn’t mention any kids, I can only assume they’re not in the picture at this point. However, if you two decide to grow your family in the future, I’d advise converting those to 30-year term policies. You’ll want the insurance there to protect everyone in the family, until the kids are grown and out on their own. In the years after, continued saving and wealth-building will lead you to a point where you’re both self-insured.

You two have done an excellent job with your finances. Keep up the good work!

Dave