How To Merge Your Finances

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Here is a guide to dealing with married finances. It can be tricky to bring two different ways of handling money together. Once you get married it is important to merge your finances. You should not do this until you are actually married since there are laws protecting you when you are married. Before you get married you should keep your finances separate. It helps to be financially compatible before you get married, but if you work together and communicate about your finances, you should be able to make things work.

Remember that talking can prevent you from making financial mistakes when you are first married. Here are the five basic steps you need to take when you merge your finances.

Talk Openly About Your Financial Situations

You should have an open discussion in which you lay it all out on the table. This is a time when you list all of your current debts, mistakes that you have made in paying on time, savings and other financial situations that you may have. When you get married you are taking on each other’s debt and assets. It is important to begin to look at the money as ours instead of his or her money/debt.

Plan a Combined Budget

Plan out a budget. This budget should make a plan for every dollar that you make. It is important to allow each other spending money that you do not have to account to each other for. Depending on your situation this amount may vary. Just be sure that you can meet your obligations, save, and get out debt before it is too high of a percentage of your income.

Set Goals Together and Create a Financial Plan

Take the time to set goals together. These financial goals will help you to communicate effectively about money. They will keep you focused and help you work through the tough times. Some common goals are to save $1,000,000 for retirement, save a down payment for a house or to save enough to retire by a certain age. You may additionally want to think about if or when you have children. If you plan on having one spouse stay home, then you will need to adjust your finances now to accommodate that in the future.

You may also want to prepare yourselves to begin saving for a college education.

Plan Weekly Budget Meetings

You need to have monthly or weekly budget meetings. You should set up a system that allows each of you to know how much you have left in the checking account at all times. You may consider using an envelope system or budgeting software that allows you to check the balances quickly. You should write out the bills together and then keep track of miscellaneous spending together. These meetings will help you to stay on track. An allowance for each of you can give you spending money without feeling guilty.

Open a Joint Account

Finally, you should open a new joint checking account. You can shop around for a bank that you both like or go to a credit union. You may decide that you want to keep one of your accounts and simply add the other spouse to this. When you open this account you should close your other accounts. It is important to change your automatic drafts over to this account.

Troubleshooting Issues with Money in Your Marriage

If your spouse refuses to combine finances, you will need to set up a household budget to cover your shared costs. You should also learn why he will not combine and work to address those issues together. There may be times when you should not combine finances. For example, if your spouse has addiction issues, you should wait to combine finances until things are under control. If this is the case, you should likely seek counseling together to work throughout the larger issue. If you are open and honest with each other you can avoid most problems that lead to financial infidelity.