Finances do change when you go from budgeting for one to budgeting together for two. Most couples are uncomfortable or unsure how to talk about money issues, but discussion is required to maintain good financial health. If you’re newly married, or getting ready to move in together, there are a few things to talk about and consider at that first dreaded financial planning discussion.
- Attitudes towards money: How do you feel about money? Some people try to be as frugal as possible, saving everything they can. Others live lavishly living paycheck to paycheck. Is money something to be squandered, saved, or do you have any bad spending habits? It’s important to know how the other person approaches money and spending if you’re looking at sharing expenses, bank accounts and/or budgets.
- To Share or Not to Share: My husband and I struggled over the decision of what type of bank account arrangement would be best when we became newly married. My advice if you are unsure is this: You can either keep your separate accounts and open a joint checking account for shared expenses, or continue to use your separate accounts and split expenses up. My husband and I ended up keeping our separate accounts and opening a joint checking/savings as well. When it comes to budgeting, I stash some of his paycheck in his personal savings, some of my paycheck in my personal savings, most of our paychecks to the joint account and leave enough in our separate accounts for personal spending according to our agreed upon budget.
- Budgeting: You need to have one, and you should agree on it. The first 2-3 months of your marriage, track your expenses and use those figures to create a reasonable budget. You will see expense increases in places you might not have otherwise anticipated (like the food and grocery budget).
- Financial History: You need to know each other’s credit scores and financial history, including outstanding debts. This is important for long term financial planning, larger purchases (like house or car), and just in case someone were to die an untimely death. Start repairing credit issues now by paying bills on time, using debt consolidation services if need be, and paying credit cards and loans down.
- Consolidate: Look for any types of bills or items you can consolidate. Gym memberships can be switched to a family membership at the same gym instead of two separate fees, car insurance policies and renter’s insurance can be moved to one single policy instead of two, unused household goods and furniture can be sold, and cell phone services can be combined when contracts are done. It’s also a good time to go through any stored items and donate or sell anything you don’t want to keep. All the extra cash can either help pay for the wedding or go into savings.
Budgeting for two isn’t so different from budgeting for one, except that it requires better and more frequent communication. The most important part of budgeting for a newly married couple is that you agree on the decisions you are making and that you are moving towards your agreed upon financial goals.
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{ 2 comments… read them below or add one }
Financial planning when first starting out as a couple is definitely important — there are things that can be consolidated or eradicated completely. It’s an important thing to think about when choosing a bank or credit union, planning for the future, and setting a monthly budget.
A really useful budgeting tool is http://www.budgetmath.com. Sooo easy to use and only takes a few minutes. Automatically creates charts and shows lots of information. And it also calculates your discretionary income..