Getting married is a big, exciting step, but it also carries with it some new responsibilities. One of the biggest changes that newlyweds encounter is learning how to handle money jointly. Following are some guidelines for how to make a smooth transition to sharing money with your spouse.
Honesty is the Best Policy
The most important first step is to honestly discuss your finances with one another. Not only do you need to 'fess up to how much debt you have, including student loans and credit card debt, but you have to agree on how to prioritize the repayment of debts. The best policy is to pay down debts with higher interest rates first, or to try to consolidate your debt into one manageable monthly payment.
The dreaded Debt Discussion, and many similar financial discussions in the future, will go much more smoothly if you are honest with yourself and your spouse about your "spending style."
A spending style is simply your tendencies when it comes to spending money. For instance, if you get money back when you e-file taxes, will you consider this a windfall and spend it on something you both want, or will you save it or fold it into the monthly budget? If together you and your spouse can agree on how to prioritize family budget goals, you can both accommodate each other's styles while still living up to each other's expectations.
Not all considerations need be deep discussions, however. Some logistical considerations in sharing money with your spouse are:
• Create a monthly budget to track earnings and expenditures
• Keep important documents in a lock-box that both partners have access to
• Change all the beneficiaries on your life insurance plans and retirement savings accounts
• Decide jointly how much to put away each month for college savings and retirement
A Bright Beginning
Though experts say that money is the issue that is most likely to be at the root of most marital disputes, a little bit of forethought can keep married couples w5orking together to maintain and improve financial health. Keep in mind that whether you e-file taxes on your own, or hire someone to file for you, filing jointly will often be beneficial. That being said, e-filing will usually save you time and money. While some complicated situations may call for an accountant to maximize your return, most don’t.
Lastly, make sure and keep your spouse informed about your spending and saving, and make sure he or she does the same with you. This is only the beginning of a lifetime of communication on this important issue, so try to start out being honest, understanding, and goal-oriented, and your financial health should flourish along with your marriage.