Today, with both the bride and groom in successful careers, it’s difficult to know just how to combine finances once you become a married couple. There are many things to consider. You should start off by blocking out a time both of you can discuss financial matters well before the wedding so there will be no surprises. This conversation might be smoothly prefaced by giving him that personalized wallet for his wedding gift.
Many couples choose to keep a portion of their finances separate. This can serve two purposes. One is that neither party feels they have to ask the other for spending money. The other is that each person feels they have some control over their own financial well-being. Separate savings or checking accounts are often retained after the couple marries.
But all agree that the couple should have at least one joint account. This can be used for all purchases pertaining to the house, upkeep, household bills, groceries, and larger purchases. This can easily be done by closing a prior savings account and moving the money to a new joint account. Both partners will need to be present and agree to closing out or transferring funds from another account that they previously held separately. For some couples, having their entire paycheck transferred electronically into their joint account just makes sense. It’s easier than remembering each month to go to the bank and transfer funds.
Online banking has simplified everything from checking your balance to getting a mortgage. Today both partners can have access to the joint bank account, transfer funds, make deposits, and see if purchases have posted. This is a good way to keep tabs on the account balance.
Experts also agree that having one joint credit card with both people listed as cardholders and carrying cards is a good idea. This allows for emergencies or times when a larger purchase needs to be made on the spot.
Of course, you and your partner should discuss matters together. What works for one couple may not work for you. You may find that you want all your money in a joint account at your favorite local bank or that you want totally separate accounts for tax reasons. You should consult a professional accountant or tax preparer before doing anything. Also, have a financial adviser look at your 401K and other deferred savings plans before you move anything to avoid possible penalties. It may be smart to leave those accounts where they are until maturity. Only a professional can give you advice that will work for your unique situation.
You will also want to consult a professional if you are selling or buying a home together. Many arrangements can be made that you might not have considered or even known about.
Having a conversation about finances is not always easy but should be done early on in the engagement. If issues come up that you were not aware of like debts or large loans that need to be repaid, it’s better to know up front than to find out later. Often small details will be divulged that can help you both understand each other’s spending and saving habits. The more you know, the easier it will be to combine finances and have a household that runs smoothly. Lastly, make sure both voices are heard and that you feel comfortable with the arrangement you and your partner reach. If you have any doubts, revisit the subject before the wedding.
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