When you're newly married, you want things to go as smoothly as possible. One issue that you need to settle early in your marriage is how to combine your finances. You've probably already selected a home to live in and have all the utilities turned on, but how are you going to pay the monthly bills. Here are a few tips and ideas for a smooth transition when combining finances.
Create a Realistic Budget
Sit down with your new partner and create a budget. It's easy to get in the basics, such as housing, utilities, vehicle payments, and other fixed costs. However, you need to be realistic about other areas.
Even if you don't buy new clothes every month, you need to account for clothing in your budget. It needs to be a realistic amount that spreads clothing purchases over a twelve-month period. Perhaps, you buy most of your new clothes in the spring and fall. If that's the case, you don't want to end up with a large bill in April and September without money already saved to cover them.
You need to discuss outstanding debts with your new spouse. From student loans and medical bills to credit card bills, you need to account for these debts in your budget. You might consider a separate plan to pay down debt.
Separate Accounts, Joint Accounts or Some Other Version
As a couple, you need to decide, if you want to open joint accounts. You might also decide to keep your money in the separate accounts, that each of you already has. Another option is to open a household account, and both partners move money into the account to cover expenses. This leaves each of you with separate savings accounts.
The idea of a household account brings up the issue of how much each partner pays into the household account. If both partners make around the same amount of money, then a 50/50 is the easiest way to go. However, if one spouse makes considerably less than the other, you might consider splitting the percentage of money each of you puts in the household account differently.
Saving for the Future
When planning for the future with your new partner, you have big dreams. Maybe, you want to buy your dream home or have children. After creating your budget, you might consider setting long-term saving goals for a down payment for a home or maybe to start a business.
Your goals should include how long it should take you to save the money, and shorter goals for how much to save each month or year. Working together to save for the future is a great way to bring the two of you closer together and create a secure financial future.
There is going to come a time when one of you is out shopping and wants to make a luxury purchase. In a perfect world, you would run all of these purchases past your partner. To avoid any arguments set a limit on the price of a luxury item that one partner can make before consulting the other.
For example, you and your spouse might agree that either of you can make a purchase of up to $300 before consulting the other. For example, you're out shopping and find a bargain on a pair of high tech earphones for $200. You can go ahead and make this purchase. However, if the item is a $1,500 fridge, then you need to wait and discuss it with your partner before buying it.
Merging two sets of finances together doesn't need to be a headache. With open lines of communication, you and your new partner can start your new life together on firm financial ground.