Merging Finances: What to do before you say “I do”

The gown has been bought, the venue has been chosen, and the flowers have been ordered. There are so many details that go in to planning your perfect wedding day. As couples find themselves getting ready to walk down the aisle, it is essential to discuss how matters of the pocketbook merge with matters of the heart. Like everything in marriage, open dialog and careful planning can avoid later conflict as well as create healthy boundaries and expectations surrounding money.

Conversations to have before saying “I do”

• What are your financial goals? Create a list of financial priorities that are important to you both. Determine how you both would like to accomplish these goals.
• What does our combined budget look like? Laying out a combined monthly budget can help determine not only what you will have to spend on necessities, it will also help you determine how you can save for your goals. If you are unsure where to start, a financial advisor can help.
• What debts are outstanding and who will pay them? Be honest and candid about debts such as credit cards, car loans, and student loans. On the same note, be honest about any concerns that may come up later regarding credit history.
• Who will pay household bills? Will this be something you do together or individually? By discussing this ahead of time, it can alleviate tension later.

Joint or Individual Bank Accounts

While it may seem that logical for married couples to combine bank accounts, there is not a one size fits all approach. For many couples, combining accounts can make budgeting and paying bills a simpler process. It also creates a focus on “our money” vs. “my money and your money” which is particularly helpful when incomes are not equal.

Some couples may forgo combining bank accounts if one spouse has considerable debt or bad credit. This could also be a consideration for couples who are remarrying or marrying later in life.

Another option may be to maintain separate accounts, but run household expenses from a joint account. Both spouses will transfer an agreed upon monthly contribution from which expenses will be paid. This hybrid type approach can allow all the benefits of joint budgeting, but also allows for spending without judgment from the individual accounts.

Keys to Monetary Marital Bliss

If you take a quick poll amongst married couples, you will likely find that the topic of money and finances is one of the most common reasons couples argue. Therefore, it is so important to have conversations before marriage to establish healthy expectations.

In addition to premarital conversations, having ongoing and honest conversations about finances can keep you and your spouse on track with spending and savings strategies as well as be the foundation of your financial wellness.  Having ongoing conversations about money is the first step in planning your long-term financial strategies such as planning for children’s education, purchasing a home and retirement. By working together and having communication open, you will be well on your way to establishing financial wellness as a married couple.

Rebecca Agamaite Investment Advisor Representative  Rebecca joined the firm in 2011 as an Investment Advisor Representative. In this role, she works with clients to manage their investment assets and help them obtain their financial objectives. Rebecca brings a great deal of experience to the team having worked for several years at Marshall & IIsley Bank and MetLife. She earned a Masters of Business Administration degree (with an emphasis on finance) from Concordia University.

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