Preparing to Combine Finances After Marriage

Hello World!  Welcome Friends!  The big day is fast approaching. You are sure about committing your lives to each other but still have questions about whether to consolidate your finances. Here is what you need to know. 

Source

Statistics

There are different ideas about what it means to combine finances. Some couples merge all of their money, and others maintain both individual and joint accounts. About 20% of couples keep their finances completely separate. Reasons they cite include independence and convenience. About one-third of couples say they argue monthly about finances. Those who maintain separate accounts are five times more likely to leave their spouse because of money. 

Honest Conversations

Before you combine your accounts, you need to have a tough conversation about your assets and debts. Some people are more comfortable talking about money than others. Recognize this and meet each other where you are without judgment. It is critical that you are honest with each other about what you have and what you owe. Money management is difficult enough without surprises. Laws vary from state to state, but generally what you bring into the marriage is yours and what you earn after the marriage belongs to both of you. This includes debt. Create a balance sheet with assets and debts and who holds each. People often associate this with divorce. However, maintaining this sheet together throughout your marriage may keep you from looking up the Uniform Marriage and Divorce Act.

Decide what your financial priorities and goals are. Plan together so that these are shared priorities and goals. Everyone has different views and values about money. Talk about this and come to an agreement where you can and accept your differences where you can’t. Even where you don’t agree, you can find solutions that work for both of you. 

What You Need

You need to agree to a budget to determine your expenses, both needed and wanted. Establish who will pay the bills, do the shopping, prepare taxes, monitor investments, etc. There is not one method that works for everyone, but it is important to make decisions about who is doing what to ensure that the mortgage gets paid on time and there are groceries in the refrigerator. Even if you decide to maintain separate checking accounts, consider a joint account for household expenses. This will help alleviate duplicate or surprise spending. Finally, you need to track your spending. This is not so you can judge or critique each other’s spending. Rather, you need to be honest and transparent about where your money is going. 

Perhaps the most important thing is to continue having the money conversation. You want to make sure that you stay on the same page. Evaluate what is working and what is not. Make changes when needed. None of this is set in stone. You don’t have to argue about money. If things are getting heated, set up another time to talk. Remember that as long as your shared priorities and goals are the same, you will figure it out. 

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Toodles,