Marrying Your Finances

You’re getting married, congratulations!

Since we’re a credit union, it’s only normal our marriage advice would be to talk about finances with your future spouse. Discussing how you’ll handle past, present and future finances can get your marriage off on the right financial footing.

Financial Baggage
Have a discussion about how you’ll handle premarital debt. Will your spouse be solely responsible for paying off his or her old debt or are you going to pay a portion of it? Keep in mind that if your partner has many large debts and has a pattern of irresponsible spending, the behavior may not stop after you’re married.

Legally, you’re not responsible for any debt your partner accumulated before marriage. However, if you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), after marriage you and your spouse are jointly responsible for any debt either of you accumulates. If you apply for credit jointly and your spouse has a poor credit record, their record can damage yours. It may also affect your ability to meet shared financial goals, such as buying a home.

Combining Finances
There are several different ways to combine funds. Some couples keep their financial accounts separate and divide expenses equitably. Others open a joint account for shared expenses as well as keep their own personal accounts. Many couples decide to keep the amount of accounts to a minimum, and pool everything into a shared accounts.

Budgeting and Bills
It’s important to create a realistic budget. Have an open discussion to figure out short and long-term financial goals that will work for both of you.

• How much you will invest?
• How much you will deposit in savings each month?
• How much will be set aside for emergencies?
• How much should each of you be able to spend as you wish?
• Will both of you have full-time jobs, or will one of you work part time or stay home?
• If you keep accounts separate, who will be responsible for which bills?

It’s a good idea to decide who will manage the money, especially if you are deciding to combine any or all accounts. Who will keep track of your checking, savings, credit cards, loans, investment accounts or bill payment? Both spouses should be aware of tracking accounts and knowing where the money is going, but many couples find it makes sense to divide recurring responsibilities. If you don’t identify these responsibilities upfront, bills may go unpaid and accounts might get neglected.

Keep it up
Agree to have frequent meetings to discuss your finances to make sure you’re sticking to your budget and are on track toward meeting goals. This is a good time to assess how responsibilities, spending, saving and accounts are being handled, and if anything needs to change. If you anticipate major expenses, discuss how you’ll handle them.

Having these financial discussions before you marry may not be the most romantic thing to do, but they’ll help ensure your relationship (and finances) remain happy, stable and strong.

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