Getting Married and Merging Money
Tips for Newlyweds Combining Finances
Getting married involves some big decisions, including how to manage finances. This article includes tips to manage your money as a couple.
Getting married is not just about the merging of two lives. It’s also about the merging of finances, assets, and debts. When newlyweds don’t see eye to eye on money matters, it can lead to big problems. Following are a few tips to help you maneuver around the money basics.
The Big Talk
Don’t wait. Have a candid discussion before walking down the aisle. This is the time to be forthright about your financial views. Many couples delay talking about finances until they are married, which can lead to big surprises regarding debt, student loans and credit reports.
Conduct a Financial Review
Make time to jointly review individual bank statements, assets, debts, and investments. Commit to an aggressive plan to knock out any debt. If one or more credit scores are low, plan to rebuild those scores as quickly as possible. Credit scores are important when applying for car loans, mortgages and even apartment leases.
Share and Compare
What are your individual spending tendencies? Discuss spending habits and determine how you will function financially as a couple. Different spending styles can cause tensions to run high, especially if there is little communication on the subject.
Set a Budget and Save
Together, you will need to set a budget to determine how money will be spent. Plan to set three to six months of expenses aside in an emergency fund in case of unemployment or short-term disability. Just a few months of unemployment or unexpected medical bills can become a huge setback financially. Having a safety net will help keep couples from delving into debt when the unexpected occurs.
To Share or Not to Share?
You must decide how the two of you together are going to handle your money. A joint account is a good choice if you plan to combine both incomes. If each spouse prefers to keep their individual account and split bills and expenses, separate checking accounts may be in order. And those who want to combine some money for bills and expenses but keep some separate for individual spending can consider one joint and two individual accounts, sometimes referred to as “His, Hers, and Ours”. Just remember, there is no “one-size-fits-all” plan. Couples should do what feels right for them.
The Long Haul
You’re in it for the long haul, so be creative and willing to compromise. Schedule financial “date nights” to check your progress against your plan. Unexpected expenses will occur and plans will change, so be willing to be flexible.
