From choosing a color scheme for your wedding to creating a guest list, getting married means making many decisions. With so much excitement, it is easy to overlook the importance of sitting down and discussing your finances as a married couple. Although financial decisions can be somewhat stressful when you are combining households, coming to an agreement on these following areas will set you up for a stronger financial future by making sure that you are both on the same page regarding how your finances are managed.
Should You Combine Bank Accounts or Keep Them Separate?
Turning two into one means more than just making your matrimonial vows. One of the first decisions you will need to make is whether or not you prefer to merge bank accounts. For most couples, creating a combined account is important for reinforcing that even your finances are part of the partnership. If you do prefer to keep your accounts separate, then creating a joint account that is used for major bills will ensure that you both have full knowledge of how your main financial obligations are being managed.
How Will Debt Be Shared?
It is important to understand that the answer to this question will depend upon several factors since your state will have laws that could influence how debt is shared. While most states view debt that occurred before marriage as being only that sole person’s responsibility, you may discover that you are responsible for any debt that your spouse takes on after the marriage. Regardless of how debt is divided up, it will be best to keep in mind that making paying off debt a priority will only benefit your marriage. Sit down and assess your combined debt, and allot payments in your budget that will pay off the highest interest rate accounts first.
What Will Be Your Budget?
When two working adults enter a marriage, it is easy to feel as though you have plenty of income with a dual income. Yet, it is still essential to create a budget that you both agree upon. Begin by deciding what type of tool will best help you manage your budget. Some couples still prefer the pencil and paper method while others utilize smartphone apps and other software that can provide each person instant access to the latest stats. Once you have your preferred system, talk about how the money you have left over after bills will be distributed. As you do so, make sure you agree upon luxuries such as dinners out, gym memberships and money spent on hobbies.
Who Will Make the Payments?
During your first year of marriage, the last thing you want to discover is that neither of you has paid a major bill. This is why you will need to discuss who will be responsible for handling each payment. For some couples, it is easiest for one person to handle all of the monthly payments, while others prefer to divide it up evenly. While either method will work, it is important to remember to add in new accounts as they arise. If one person is handling the payments, then make sure to communicate so that the other partner can take over some if they begin to feel overwhelmed.
How Will You Plan for Long Term Needs?
In the rosy glow of newlywed bliss, the last thing you want to think about is something bad happening to you or your partner. However, it is important to plan for the future. Decide now about how much life insurance you will need and how assets would be divided should the worst happen. Then, formalize your decisions with a written will that will ensure you have legal proof of your decision. As time passes, remember to reassess this decision since career changes, having children and other life events could alter what works best for your situation.
While most couples touch upon finances at some point during their engagement, it is critical to hold a serious conversation once you are officially married. Not only will making these decisions now protect your financial future, but it will also prevent those arguments about money that every couple dreads. Finally, make sure to stay on top of your decisions by planning weekly financial dates that will allow you to discuss where you are toward meeting your goals while ensuring that both of you are happy with the plan.