Monday, May 02, 2016
Navigating a marriage of finances
When couples get ready to tie the knot, one of the big decisions they face is how to approach their finances together.
Should they merge their checking and savings accounts, keep them separate or do a combination of the two?
Newlywed Alison Muir, a teller at Dupaco Community Credit Union, knows the important conversation first-hand.
“Our path is a still a work in progress,” she says of joining financial forces with her husband. “We individually have some debts that we want to clean up before we fully merge most of our finances. We also plan on each having an individual account for our own special spending.”
If you’re preparing to say “I do,” Muir has some advice for you:
Keep the lines of financial communication open
“Communication is key to any part of a relationship, but especially when it comes to finances,” Muir says. “I really struggled with credit cards when I was in college, and having that conversation with my husband when things started to get really serious was tough. But I knew he deserved to know, and his support has helped me raise my score.”
It’s important to talk about your financial goals, both as a couple and as individuals. Share your hopes for the future, whether it’s going back to school or starting a family, buying a home or purchasing a new vehicle.
You need to be completely open with each other and discuss all aspects of your hopes and dreams, and work together to make a plan to reach those goals. Don’t forget to look at the day-to-day expenses too.
“We’ve also sat down and looked at what we spend each month for standard living expenses,” Muir says. “Until we have our finances fully merged, we worked out a budget each can afford to cover our bills.”
Weigh the pros and cons of joint accounts
Maintaining a combination of both joint and individual accounts is often a great place to start for younger couples, Muir says.
Take an honest look at each other’s strengths and weaknesses when it comes to managing finances. If one person is exceptionally better in that department, you might agree to make that person the main financial decision-maker.
In the end, each couple has to decide which approach works best for them.
Lean on your credit union
No matter what you decide, you don’t have to tread this new financial path alone.
“Dupaco offers great products for any member, but especially for a couple starting their joint financial journey together,” Muir says.
By Emily Kittle