Tying the Knot? Just Don’t Forget About Your Finances
Marriage comes with a lot of compromises. It’s not the simplest thing in the world to consolidate two lives into one. You start making decisions as a couple, like buying a house, or a new car, or taking a vacation. Many of these decisions boil down to the issue of money, a conversation which is not always the easiest to have. Sometimes one spouse will handle all of the finances while with other couples, the responsibility is split. Some couples decide to move everything into a joint bank account, while others still manage their money separately. While sometimes these models can work, other times they can end in disaster. Here are a few things you can do as a couple to make sure you are doing the right thing with your finances.
Just because your name is on the credit card doesn’t mean it belongs to you. Many times, one spouse opens the account while the other is an authorized user. This means that all of your credit history will be tied to your spouse's name, and you’ll have no credit history of your own. What if something happens to your spouse or you end up getting a divorce down the line? You will have no credit history of your own which could be troublesome when you are trying to get a mortgage, buy a car, apply to rent apartments, and much more. Make sure you have at least one credit card in your own name.
Joining accounts is something many couples struggle with. You are suddenly very aware of what each other is spending, which can be both good and bad. To merge accounts or not - that is the question. Don’t worry too much, because both models can work. No matter which you choose, make sure you are open and honest with each other about how you spend your money. Make sure you have conversations about whose money is paying for what if you decide to keep your accounts separate. Maybe one person's account pays for the mortgage while the other’s pays off the credit card bills. Have a plan around where your money is going, and how it works together.
Whether it’s from a credit card, or a mortgage, or student loan debt you brought into a marriage, make sure your debt is divided evenly. This way you both will be accountable for debt if something were to happen. If you have all the debt in your name, and you were to get a divorce, you would be the one responsible for paying it off, not your spouse. Set up automatic payments for all of your bills, to be sure you and your spouse don’t get each other into more debt.
The worst thing you can do is to take yourself out of the equation when it comes to finances. Know where your money is going! Take the time to understand your finances. This way, if the unexpected were to happen, you wouldn’t be left at a disadvantage. Your money as a couple goes to securing your family’s future, so make sure you’re in the know when it comes to financial planning. Have regular meetings with your spouse to discuss the status of your financial plans, and be sure that you are involved in all meetings with a financial adviser. This way there won’t be any surprises.
Marriage is a partnership in all aspects, and the unexpected is bound to happen at some point or another. Make sure you have the right financial plan for you and your family.
Our content is created for educational purposes only. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Vantis Life encourages individuals to seek advice from their own investment or tax advisor or legal counsel.