Marriage and Money: 10 Tips for Financial Bliss
Money can’t buy happiness, but open discussions about finances can significantly strengthen your marriage. Here’s a comprehensive guide to help you and your partner achieve financial harmony and budget happily ever after.
Conduct a Financial Checkup Together
Before getting married, have an honest conversation about your finances. Discuss each other’s credit card usage, spending habits, and financial indulgences. Understanding your partner’s financial background can help you avoid potential pitfalls and ease the process of merging your finances. This knowledge will assist in making informed decisions once you’re married.
Get Acquainted with Your Partner’s Debt
Before combining your finances, understand the extent of your partner’s debt. Work together on strategies to pay down debts while keeping your finances separate initially. Avoid opening joint accounts or cosigning loans until debts are under control. Maintaining at least one strong credit history is crucial for future financial security. Explore various debt reduction techniques together.
Save for the Wedding and Future Goals
As soon as you’re engaged, open a savings account for your financial goals and future expenses. Financial experts recommend saving at least 10% of your combined income monthly. When saving for a wedding, consider increasing this percentage to ensure you can still contribute to regular savings while funding the big day. Even with financial support from family, personal savings for a honeymoon or a new home are beneficial.
Create a Manageable Budget
Collect all your bills and financial documents to create a detailed budget. Calculate your monthly expenses, combined income, and the leftover funds. Include potential wedding and honeymoon costs. Set spending limits and agree on a specific amount each partner can spend without prior discussion. This transparency helps prevent financial surprises and promotes mutual understanding.
Assign Financial Responsibilities
Divide financial duties between both partners. One might handle day-to-day bills while the other manages long-term investments and retirement planning. This division ensures both partners are actively involved in managing finances, reducing the burden on one person, and fostering teamwork.
Decide How to Combine Your Finances
Determine the best way to manage your finances as a married couple. Options include opening a joint account, linking individual accounts, or maintaining separate accounts. Consider your lifestyle and preferences to choose the best method for both of you. The right approach varies for every couple, so carefully weigh your options.
Update Your Beneficiaries
Once married, update your beneficiaries on life insurance policies, 401(k) plans, wills, and other benefits. Naming your spouse as a beneficiary ensures they receive the necessary benefits if something happens to you. This step is crucial for securing your partner’s financial future.
Adjust Your Withholdings
Married couples can file taxes jointly or separately. Consult your spouse and a tax professional to determine the best filing status for your situation. Review and adjust your payroll withholdings accordingly using the IRS Calculator. Proper withholdings prevent unexpected tax liabilities.
Schedule Financial Date Nights
Regularly discussing finances strengthens your relationship. Set aside monthly financial date nights to review expenses, discuss future financial decisions, and track your progress toward shared goals. Continuous communication about money matters keeps both partners aligned and proactive.
Update Your Bank Records if You Change Your Name
If you change your name after marriage, update it on all banking and investment accounts. The process varies by state, so contact your bank for specific instructions. For Bank of America customers, visit a financial center with a government-issued photo ID and your marriage certificate. A banking specialist will assist you with the necessary forms and obtaining new debit or credit cards. If a visit isn’t possible, contact Customer Service at 800.432.1000 for assistance.
By following these steps, you can build a solid financial foundation for your marriage, ensuring financial stability and mutual understanding as you embark on this new journey together.