After 27 years of independently maintaining her own finances, CPA Amber Gilstrap took the plunge. Well, yes, she got married, but she also combined finances with her new husband. Marriage is often the catalyst that prompts two people to mix their money, but even those who live together may reach a point where they’ve grown weary of splitting checks and dividing up the household expenses. Married or not, if you and your significant other are talking about combining your finances, be sure to look at all the issues and angles first.
Find a Happy Medium
Maybe you’re the spender while your sweetheart is a saver. When you’re considering combining finances with your spouse or partner, work out your financial viewpoints before you do anything else. If you don’t develop a plan for your joint finances that you can both agree to, the road to merging your money will be a rocky one, especially for couples with large differences in income. Plan together, make compromises and avoid being critical of one another’s spending philosophies and habits. Agree to set aside a specific amount of money each month, even if each party contributes a different amount, to go toward a vacation fund and an emergency account. Set a number of times each month you’ll eat out as a couple, and cut back on socializing that costs money. These are concessions that will help you both take steps toward each other’s financial philosophies to make combining your finances an easier process.
The Couple Who Budgets Together…
You might split the household expenses right down the middle and to the penny each month, or maybe you take responsibility for some bills and your sweetie pays others. In either case, set a budget. It’s the smart and fair thing to do. For example, if you pay for the groceries but your husband is always tossing filet mignon and Cristal into the shopping cart, resentment will build up. The same will happen if he pays the cable or satellite bill but you insist on having the premium package, even though you rarely watch TV. Hitched magazine advises you sit down and list everything from food to utilities and remember to include insurance and extras like cable and Internet. See how your spending compares to what you really can afford and look for ways to cut back, if necessary. Limit steak to once or twice a month and champagne to annual special occasions. And shop around for services. Websites such as Bundle.tv are useful resources for comparing prices of Internet, cable and phone service, and can recommend companies that will discount fees if you get all your services through them.
Joint Accounts or Not?
Joint checking accounts aren’t for everyone. Personal Dividends says there’s no right or wrong when it comes to joint or separate checking accounts, just as long as individual accounts aren’t being used to hide things from one another. Joint accounts do make combining finances and paying household expenses easier. Alternatively, individual accounts let you retain control over your own finances. Another consideration gives you the best of both worlds: each of you maintain your separate accounts, but open a joint checking account from which shared, household bills are paid.
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