Newlyweds merging finances

[Grumpybutfun]

My wife and I have been married for twenty years and have pooled our resources. We always discuss big purchases, have a travel account, set up individual retirement funds and strategies since she is younger than me, have a monthly meeting to discuss all rental properties, investments and strategies as well as our children's needs and any huge maintenance or projects coming up. I installed Quicken when we first married so we can both follow and make adjustments as needed. It lists everything about your finances and I would recommend it to any couple merging finances in marriage or LTRs. It only takes a few minutes a day to enter relevant information. Set up Direct Deposit for your bills, discuss future plans in paying off individual education expenses, and most important of all, sit down and make a plan for how you are going to do this as quickly as possible. Interest is a rip off and needs to be whittled down before any other kind of saving since you are paying for the privilege of borrowing money in a big way. Make a budget, discuss and negotiate, and do all of this with your child in mind. Discuss retirement expectations such as when both of you desire it and also have a plan in case one of you get laid off. I always say have enough put away for serious illness and living expenses for at least six months.

Discuss if you both will work after the baby and any childcare you may need. Best to budget that in as well.

 

Practical application is important, finances should be the product of both people in a relationship so even though I am in charge of it because I am anal and concise, we are both responsible for our financial security in life.

 

Both of us are educated and independent in that we could be fine financially without the other. I have went to great pains to make sure my wife who has her own career and is financially capable and perfectly solvent is taken care of in case I pass because I don't want her to have to lose her quality of life or have to think about it. A good plan for the future is for you both to sit down and make a list of where all of your investments are, pensions, IRAs, and/or money market accounts. List phone numbers, and account numbers and keep it in a firebox safely hidden away. I sent a copy to our oldest daughter who is financially a guru to help her mom when I pass. I am a few years older than my wife and her people live forever. She knows all of this stuff, of course, but I want to make it easy for her because she will be grieving.

Also, start discussing how to teach your children to be financially savvy. Make sure you are on the same page with all of your parenting roles and expectations, and don't stop negotiating until you both feel validated and heard. We made a good team as parents because we made sure we discussed and knew the others view on things so our kids knew there was no wiggle room in our united front. This can apply to more than just finances...be united, figure out how to both contribute to childrearing and teaching.

Congrats on your new baby and your life together. Be capable of being independent in case of death or divorce, but don't put all your eggs in that basket expecting it. Marriage is about two people working towards a common goal. You have to figure out what that goal is for you three. Love is an action, not just a feeling so show it even when in financial straits or having financial problems.

Read, read, and then read some more on personal finance. The ones I had my kids read are....

 

Your Money or Your Life by Vicki Robins

The Science of Getting Rich by Wallace Wattle

The Total Money Makeover by Dave Ramsey

The Money Book for the Young Fabulous and Broke by Suze Orman

The Millionaire Next Door ...don't remember the author but it is still on Amazon

The investment Answer by Goldie and Murray

Thinking Fast and Slow by Daniel Kahnman

 

Being a couple is expecting the best but preparing for it all. There is nothing more intimate than sharing your finances, and nothing else quite so scary for men so remember any financial slights or subterfuge will feel like betrayal so don't abuse his trust in financial matters.

 

I wish more people would ask these questions and try to figure this stuff out in the beginning instead of being afraid of the hard conversations. Great post by you...very happy to see it here.

 

Best,

Grumps

[atlg8r]

My wife and I have been married for twenty years and have pooled our resources. We always discuss big purchases, have a travel account, set up individual retirement funds and strategies since she is younger than me, have a monthly meeting to discuss all rental properties, investments and strategies as well as our children's needs and any huge maintenance or projects coming up. I installed Quicken when we first married so we can both follow and make adjustments as needed. It lists everything about your finances and I would recommend it to any couple merging finances in marriage or LTRs. It only takes a few minutes a day to enter relevant information. Set up Direct Deposit for your bills, discuss future plans in paying off individual education expenses, and most important of all, sit down and make a plan for how you are going to do this as quickly as possible. Interest is a rip off and needs to be whittled down before any other kind of saving since you are paying for the privilege of borrowing money in a big way. Make a budget, discuss and negotiate, and do all of this with your child in mind. Discuss retirement expectations such as when both of you desire it and also have a plan in case one of you get laid off. I always say have enough put away for serious illness and living expenses for at least six months.

Discuss if you both will work after the baby and any childcare you may need. Best to budget that in as well.

 

Practical application is important, finances should be the product of both people in a relationship so even though I am in charge of it because I am anal and concise, we are both responsible for our financial security in life.

 

Both of us are educated and independent in that we could be fine financially without the other. I have went to great pains to make sure my wife who has her own career and is financially capable and perfectly solvent is taken care of in case I pass because I don't want her to have to lose her quality of life or have to think about it. A good plan for the future is for you both to sit down and make a list of where all of your investments are, pensions, IRAs, and/or money market accounts. List phone numbers, and account numbers and keep it in a firebox safely hidden away. I sent a copy to our oldest daughter who is financially a guru to help her mom when I pass. I am a few years older than my wife and her people live forever. She knows all of this stuff, of course, but I want to make it easy for her because she will be grieving.

Also, start discussing how to teach your children to be financially savvy. Make sure you are on the same page with all of your parenting roles and expectations, and don't stop negotiating until you both feel validated and heard. We made a good team as parents because we made sure we discussed and knew the others view on things so our kids knew there was no wiggle room in our united front. This can apply to more than just finances...be united, figure out how to both contribute to childrearing and teaching.

Congrats on your new baby and your life together. Be capable of being independent in case of death or divorce, but don't put all your eggs in that basket expecting it. Marriage is about two people working towards a common goal. You have to figure out what that goal is for you three. Love is an action, not just a feeling so show it even when in financial straits or having financial problems.

Read, read, and then read some more on personal finance. The ones I had my kids read are....

 

Your Money or Your Life by Vicki Robins

The Science of Getting Rich by Wallace Wattle

The Total Money Makeover by Dave Ramsey

The Money Book for the Young Fabulous and Broke by Suze Orman

The Millionaire Next Door ...don't remember the author but it is still on Amazon

The investment Answer by Goldie and Murray

Thinking Fast and Slow by Daniel Kahnman

 

Being a couple is expecting the best but preparing for it all. There is nothing more intimate than sharing your finances, and nothing else quite so scary for men so remember any financial slights or subterfuge will feel like betrayal so don't abuse his trust in financial matters.

 

I wish more people would ask these questions and try to figure this stuff out in the beginning instead of being afraid of the hard conversations. Great post by you...very happy to see it here.

 

Best,

Grumps

 

This is awesome! Thank you so much. I was thinking you must be a Dave Ramsey proponent from the very first couple of sentences! This is exactly the kind of perspective we want to take when planning things out over time. Many, many thanks for taking the time to write it out!

[Got it]

I agree on the Dave Ramsey book. We are following "The Total Money Makeover". Definitely focus on getting all debt paid off and stay off.

 

I politely disagree with your view of the potential of the future but you have every right to your opinion. But I think the motto "hope for the best prepare for the worse" is the best idea and you won't regret it.

 

I have no issue with complete transparency but still set up separate accounts. Figure out how best to pay for bills and then what % should go into the other individual's accounts. Ramsey talks about that as almost play money. Regardless of divorce, etc. there are going to be expenditures that each party will want to make that the other may not prioritize or agree. This way (as in my case and a past post of mine) if my husband wants to by an expensive watch he has every ability to do so and if it comes from his account I have no issues.

 

I also think an account for vacations or something major for the household is important. It will be nice to see as it grows and then can spend it on a future time away or home improvement. Something fun.

 

For us, we will have all credit card debt paid off this year (about 1 1/2 into our marriage), and then work to continue to build our 6 month fund for living expenses. We will also accelerating the payment on our mortgage so we can get the house paid off faster.

 

For myself, finances are a very emotional topic due to FOO and I am used to have complete and independent control over my own finances. Learning to work together as a team and transparency is new to both of us so it has been a great learning experience.

 

Good luck and congrats!

[MissBee]

Never trust anyone 100%. Never leave yourself completely dependent and vulnerable.

 

Always have a parachute.

 

Putting a certain amount of money in a joint account to cover joint household expenses is fine but always have separate accounts that no-one else can touch.

 

You are full of love hormones and the world is wonderful now, but you have no idea what either of you will be like 5, 10, 20, 30 years from now.

 

If you read all these threads about people betraying their spouse, or emptying their bank accounts on gambling, drugs, prostitutes, handbags and designer clothes etc etc, the one thing they all have in common is every last single one of them swore their partner could never do something like that back when they were engaged.

 

Always have the ability to leave with the clothes on your back in the middle of the night and survive on your own.

 

Always have the ability to survive on your own if he clears out the house and clears out the accounts with his name and is gone when you get home from work.

 

Always have the ability to feed the kids and survive on your own if he gets killed by a drunk driver on his way home from work.

 

Never be dependent on someone. It's ok to choose to have someone in your life because they enrich your life and make it better than if you were by yourself, but never be dependent on another person and rely on them because you have to.

 

Always ask yourself what you would need to do if they were unexpectedly killed or left you tomorrow, or what you would need to do if you had to leave them for your own safety and well being right now.

 

I agree wholeheartedly and this is the stance I take.

 

I'm not yet at the point in my relationship where merging finances are a concern but I've ALWAYS been of the mind that we would have a joint account for household expenses and joint savings but I saw no reason why every and all monies should be joined. I totally believe in separate accounts and separate monies for one's personal indulgences as well as in case things go awry.

 

As you said, while everything is peachy now, no one knows what will happen later and most people who end up in a bind didn't expect it, so like all insurance, I hope never to have to use it, but should things go south I absolutely don't want to be in a position where I'm now destitute. I always want to be able to have my own money to fall back on should the unexpected happen.

[MissBee]

My parents were married for over 30 years - before my dad passed - and what they did was keep their accounts separate and each were assigned particular bills and financial obligations, based generally on what each one made in salary. One advantage to this strategy is efficiency. There's no need to open up new accounts and also to scrutinize every single detail. But this requires that both people be 100% trustworthy and also to have the same financial values as each other.

 

My parents did this as well.

 

In fact it was only since I've been an adult that they've opened a joint account and it was on the advice of their tax lady with regard to some tax refund situation. However, previously they've maintained separate accounts and were each responsible for particular bills and over the years adjusted as necessary based on who was earning more or what have you.

 

They have lots of issues but in terms of managing their finances they seemed to work well in that aspect.

[sumdude]

My fiance and I are getting married in May. I completely trust him, and he says he completely trusts me, too. I've never known anyone like him, and I feel completely secure that he will make good decisions for our family while always getting my input on things.

 

I moved in to his house this month because my apartment lease was up. Now, we would like to open a joint checking account to pay our household expenses, like the mortgage, insurance, utilities, etc. Then we will each keep our own accounts for the debts we brought in to the marriage (car payments, student loans, etc.). We have mutually agreed upon the amount each of us needs to contribute to the joint account monthly to cover our expenses.

 

I feel like we've done a good job of being transparent and discussing our needs/wants, but I'm never opposed to extra insight. So, is there anything else we should consider when merging finances? Any pitfalls or advice?

 

This is pretty much the same thing my Wife and I did. We have individual checking accounts that we transfer funds commesurate with our incomes into the shared account for paying bills. We do try and leave the amount of free spending money in each individual account though. just because one makes less doesn't mean he/she should only have say $50 while the other has $300.

 

 

This has been kind of difficult for both of us. We have both been married before and were the 'financial one' bill payer in previous relationships and used to that control. So there was a lot of letting go for both of us, particularly myself to get here. Plus the fact we've both been burned before made letting go of control even harder.

[atlg8r]

This is pretty much the same thing my Wife and I did. We have individual checking accounts that we transfer funds commesurate with our incomes into the shared account for paying bills. We do try and leave the amount of free spending money in each individual account though. just because one makes less doesn't mean he/she should only have say $50 while the other has $300.

 

 

This has been kind of difficult for both of us. We have both been married before and were the 'financial one' bill payer in previous relationships and used to that control. So there was a lot of letting go for both of us, particularly myself to get here. Plus the fact we've both been burned before made letting go of control even harder.

 

I never trusted anyone enough before to merge finances at all. So this is new territory for us entirely. A lot of the advice here has been really helpful though. Some thoughts that had not yet occurred to us.

[dovegirl]

My husband and I have a mix of separate and joint accounts. Here is the basis of how our agreement works:

 

Before we were married, we set up a monthly budget, including all bills (estimate on the high end) and a set amount each month for discretionary things - eating out, movies, etc. We both had input and agreed on this budget. Then, because we both make very similar amounts, we split the budget down the middle, and this is what we each contribute to the joint account every month. In addition to the "bills" money, we each contribute the same amount of "extra" money into the joint account each month. This extra money is what gets used for emergency funds, or vacations together, etc.

 

This method assumes you are easily able to realistically estimate grocery costs, gas usage, utility bills, etc. And that you have the discipline to stay on a budget, which very few people seem to have. He does make slightly more than me on paper, but he pays for insurance so our take home pay is similar. If they had been majorly different, we would have worked it so that we each paid the same percentage of our salary towards the bills.

 

Aside from that we each have our own checking and savings account, where any left over money goes. We each do what we want with our own accounts. Sometimes, one or the other or us will use our own money to surprise the other...for example, I bought some show tickets with "my" money for us to enjoy. This method has worked for us and we have not yet had any disagreements over money.

 

While you are welcome to your opinion, I do agree with everyone who says you should plan for the worst case scenario. I believe to the core of my soul that my husband will never leave me. But, a true planner plans for ALL contingencies. That is what I have done, and I hope you do the same.

[atlg8r]

My husband and I have a mix of separate and joint accounts. Here is the basis of how our agreement works:

 

Before we were married, we set up a monthly budget, including all bills (estimate on the high end) and a set amount each month for discretionary things - eating out, movies, etc. We both had input and agreed on this budget. Then, because we both make very similar amounts, we split the budget down the middle, and this is what we each contribute to the joint account every month. In addition to the "bills" money, we each contribute the same amount of "extra" money into the joint account each month. This extra money is what gets used for emergency funds, or vacations together, etc.

 

This method assumes you are easily able to realistically estimate grocery costs, gas usage, utility bills, etc. And that you have the discipline to stay on a budget, which very few people seem to have. He does make slightly more than me on paper, but he pays for insurance so our take home pay is similar. If they had been majorly different, we would have worked it so that we each paid the same percentage of our salary towards the bills.

 

Aside from that we each have our own checking and savings account, where any left over money goes. We each do what we want with our own accounts. Sometimes, one or the other or us will use our own money to surprise the other...for example, I bought some show tickets with "my" money for us to enjoy. This method has worked for us and we have not yet had any disagreements over money.

 

While you are welcome to your opinion, I do agree with everyone who says you should plan for the worst case scenario. I believe to the core of my soul that my husband will never leave me. But, a true planner plans for ALL contingencies. That is what I have done, and I hope you do the same.

 

Thanks! This sounds like what we are doing currently. I am having to urge my fiance to stick to our budget a little more than me, but admittedly, I've never been great at it either. It's definitely a learning process!

 

I guess I have the same view of having emergency savings, retirement, etc. but I never view those as a parachute in the event we divorce. But, those things could be used for that purpose if it DID happen. I definitely don't want to be unprepared for any kind of emergency, like if one of us got sick and couldn't work for awhile. Thanks!

[Got it]

I think it is really just that. If thinking of it in a "doom and gloom, my spouse is planning to screw me" mindset that is turning your stomach just set things up as contingency planning accounts for each of you in case ANYTHING happens. I think in this day and age each adult needs to be prepared to be the sole breadwinner at any moment. So the ability to do this needs to be done as well as access to accounts, safety nets, etc.

 

The beauty of this, you may never need it and what a wonderful problem to have for your ultimate retirement. Extra money!