Managing Your Money After Marriage
Summer is fast approaching. And with it? Wedding season. With the prospect of marriage, comes the prospect of merging both your finances. While the idea of dealing with joint bank accounts and mortgages might not be the most entertaining discussion you’ll have with your new spouse, it’s one that needs to be had. After all, getting married doesn’t just mean you’ll be binding two different lives and families, but you’ll need to consider it as the binding of two bank accounts, and with that, two levels of possible debt. We think it’s always in your best interest to take a thorough look at your finances before you tie the knot.
Setting the Romance Aside, For The Time Being
It’s an unfortunate truth that the divorce rate in the United States is between 40-50%. A lot of martial problems can be attributed to issues with a couple’s finances. For this reason alone, setting the romance aside and having the financial discussion with your partner before you tie the knot is an extremely good thing to do.
However, every marriage differs when it comes to financial issues. Because of this, the financial discussion that every soon-to-be-married couple needs to have will also differ. We think it’s always a good idea to, at the very least, bring up these issues before dealing with the wedding itself. After all, depending on how you want your special day to look, you could be spending tens of thousands on the ceremony and reception alone. Nobody wants to cross the threshold into marriage, only to be stuck under a mound of debt right off the bat.
Find out how divorce will affect your finances.
Starting The Conversation
Having the financial discussion before you get married can be difficult, especially when it comes to the issues of credit cards and the debt that you both might have, or the current balances of your bank accounts. However, what you need to remember is that you are getting married and these are discussions you will need to have together, time and time again. Because of this, it’s better to just rip off the band-aid and get the uncomfortable topics out of the way before you say “I do.” Below are some questions you should think about asking each other if you’re nervous about having the pre-wedding financial discussion:
- How much debt do both of you currently have? This can mean credit card debt, personal loans, student loans, etc.
- Are you thinking of merging your finances completely? Meaning you want to open a joint account? Or would you rather keep your accounts separate?
- Are you looking to purchase a house or other property once you’re married?
- Given your current financial situations, is paying for an extravagant and expensive wedding even an option?
- Is that expensive wedding more important to you than purchasing a house?
- Are you considering having children soon after your marriage? If so, how will they factor into your financial situation?
If you’re looking to take control of personal and joint finances before you get married, these questions should help you navigate this often difficult topic.
Having A Healthy Relationship, Financially Speaking
Once you’ve tied the knot, there are many different ways in which you can invest and save your money in order to maintain a healthy financial relationship. Here are a few issues that you should consider as you transition into married life.
Making Sure Your Money Is Safe
Let’s say, for the sake of argument, that both of you have at least the basic financial commodities to work with before you decide to get married. This means that you each have a regular chequing account, savings account, and possibly some form of retirement savings. A lot of married couples will decide not to join these assets at first. However, a few good questions to ask yourselves in the weeks following the wedding can be:
- Assuming you’re going to be living in a house together, whose account will the mortgage payments or rent be taken from?
- Whose account will the utility payments come from?
- What about food and other household items?
- Do both of you own cars? You might decide to share one vehicle to save money. If so, who will pay for it?
In the case of all these basic, but unavoidable expenses, opening a joint bank account is probably the best option. This way, you’ll be able to keep your other accounts separate, then deposit a portion of your incomes into the joint account on a monthly basis in order to pay off the necessary bills.
Having Your Financial Goals In Mind
Before you decided to get married, you were living on your own and the financial goals you had in mind at the time were probably a bit different than the ones you and your new spouse are going to set for yourselves. Because of this, one of the best things you can do for the financial portion of your relationship is to hash these issues out before tying the knot and make yourselves a new set of financial goals to reach. Try asking yourselves:
- In the near future, what do you want your finances to look like?
- How about for the long-term? Where do you want those finances to be in years to come?
- What’s more important? Saving up for a house? Putting aside money for retirement? Or saving up money in an emergency fund?
Making Yourselves a Budget
Let’s say that you and your spouse have now had all the financial discussions you needed to. Time to start making yourselves a budget and making your dreams a reality. The first thing you should take into consideration, in this case, is how the two of you generally spend your money. Remember, you’re working together now to achieve your financial goals, so you need to get on the same page when it comes to how you want to save and spend your collective incomes. Think about the things you’re willing to cut out of your initial budgets in order to reach those goals. However, one thing that you must always take into account is that if either of you feels like they’re being backed into a corner just to satisfy their spouse’s desires, it may cause problems for the relationship.
Want to know how to maintain an effective budget? Check out our other article.
Be Honest With Each Other
We all have spending habits. Unfortunately, those spending habits are not always wise or efficient. Maybe you’re addicted to shopping online or you like spending money at swanky restaurants instead of cooking your own meals. Whatever your particular financial addiction might be, it’s important for the relationship that your partner knows about it before you decide to get married. Financial issues can be taxing enough without bringing dishonesty into the mix. If you’re in debt at all, it’s best that you let your future spouse know about it, instead of saving it as an unwelcome surprise after the wedding.
Don’t Get Married To Your Debt
Getting married means sharing everything. It means being dedicated and honest towards your spouse and compromising in ways that will make both of you happy when it comes to your finances. For these reasons, the best thing you can do is to tackle any financial problems head on, especially when it comes to debt. Get the awkward conversations out of the way, and enjoy your marriage the way it’s supposed to be enjoyed.