Congratulations on the new marriage! Life can become a whirlwind at this time, so talking about finances may be something you are putting on the back burner.
Unfortunately, financial issues are the number one reason why couples get divorced. Finances and how you will handle them after you are married is a conversation you need to have before you get married. If not, it should be on the conversation table within the first few months of marriage. You need to know what your money habits will be in this new arrangement.
But how do you make dollars and cents out of this newly combined household? Below are a few tips that can help you establish ground rules for household finances and save as a couple.
Separate Accounts
Some couples find that maintaining separate accounts could be more comfortable for you initially, especially if you are accustomed to managing your finances. However, even when you keep individual accounts, you need to talk about who will pay for what.
Even if you decide to keep separate accounts, you need to talk about household expenditures, savings, and retirement goals. Individual accounts give you more freedom, but this doesn’t mean you shouldn’t have a joint savings account.
Joint Account
In terms of simplifying the account as a couple, a joint statement can be the easiest. You can track spending on the family using a spreadsheet or budgeting software. The drawback here is that you might disagree with your partner’s spending habits, and it might be difficult to keep surprises a secret.
Both Joint and Separate Accounts
Another option is to have a joint account and your separate accounts. This is a bit more complicated but sometimes the best solution. All of the income goes into a joint account and is then separated into different savings and retirement accounts.
Having a certain amount that goes into a personal checking account allows each member to use the funds however they wish. This way, each of you is responsible for a certain amount of money that can be used however you wish.
The only downside here is that it requires you to open several bank accounts. You’ll need to check on things like credit union rates, bank fees, account setup costs, and more. Credit unions in particular function similarly to banks. However, any profit that a credit union earns can help lower your rates. Getting a financial plan put together can prevent many future disagreements.
Regardless of how you decide to manage your money, you should consider all factors when planning your lives. There is no specific way to manage your finances, but it takes communication, trust, and planning to have a marriage that doesn’t have conflicts about money. If you can’t seem to find a method that works for both of you, consider talking to a financial planner to help you make a better decision.
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