Getting married is one of the most exciting and life-changing experiences for any adult. However, when you take the steps to spend the rest of your life with someone, you’re making big changes in all aspects of your lives as well. One of the biggest and certainly the most important steps is deciding how to merge your finances once you’re legally married. It can certainly be a challenge, but it can easily be done with the right amount of communication and openness. The decisions you make as a married couple can affect the future of your finances for years to come.
Here are some the most important steps and discussion points you and your future spouse should go over together:
What are your financial goals?
Two people can be compatible in most ways, but if they don’t have the same or similar goals when it comes to their finances, it will probably not work out well in the long run. Before you tie the knot, go over both short-term and long-term financial goals that you can achieve together. Short-term goals can include paying down a credit card, buying new furniture or a new car, or vacation getaways; long-term goals generally include homeownership, becoming parents, and ideal retirement plans.
Your bank accounts – to merge or not to merge?
Before you and your future spouse marry, this is a very important decision to make. Sharing a joint checking account comes with a number of advantages: your money all goes into one account, you’ll save money on maintenance fees from having two separate accounts, it’s easier to keep track of your financial records and statements, and so forth.
What’s your ideal budget?
If you’re already living with your future spouse, you may already have a budget lined out. Even if that’s the case, your financial situation will change to a certain degree once you’re legally married, notably for tax purposes. If you haven’t created a budget or if you think you need to overhaul your current budget, start by listing out both of your income sources (salary, investments, dividends, etc) along with your monthly expenses (rent/mortgage, utilities, credit card, groceries, etc) so you know how much expendable income you have each month. Make sure you’re in agreement on who ensures the bills are paid on time, and maintain a record-keeping system (online and mobile banking are a good jumping-off point) for all payments.