For starters, unless there is a nuptial contract, you will share your assets and debts with your spouse 50/50. Don't worry. You can still create a post-marital agreement after the wedding day if you choose, but remember that you must each must be represented by lawyers, and full disclosure is required.
If you want to simply share your money, you and your spouse should determine your:
- Net worth. In addition to your income, make sure to list your checking and savings account amounts; money markets or CDs; employer benefits, such as 401(k)s and life insurance ; real estate holdings; and so on.
- Monthly expenses. Besides rent, food, and other predictable expenses, remember to include disability and health insurance (you now have the option to pick one plan so figure that into your finances). You might also want to track expenses closely for at least a month to determine where your money is going. It's an easy way to determine spending patterns and pinpoint solutions for tighter budgets.
- Debts. Debts can mean credit cards debt, school loans, mortgages, car payments, investment debts (if you buy on margin), and more. With each, you should determine how much you owe and the interest rate of return. With credit cards, it might be wise to switch your balances to cards with lower rates, or use your savings to pay off as much as possible the accounts with high-interest rates. Estimate how long it will take until you are free of debt.
- Financial goals. Talk with your spouse about financial goals. Do you want to travel and dine out, or eat in and save? How much do you want to spend on buying a home, decorating expenses, leasing a car, and so on?
- Budget. Create a monthly budget to meet your financial goals. Make sure to set aside money for emergency expenses, or in case either of you get sick or disabled. (The rule of thumb is to save from three to six months rent.)
- Bank account type. Many couples set up a joint bank account; others decide to keep their incomes separate and divvy up the bills; still others have a shared account for household bills and separate accounts for personal use. The choice is up to you. Alternatives to checking and savings accounts include money market accounts, which earn a higher interest rate than savings accounts, and certificates of deposit, or CDs, where you make an investment for a fixed number of years and earn interest. Short-term U.S. Treasury bonds are also an option. But there are pros and cons to each. Make sure to research them carefully.
- Did You Know...?
The non-profit Consumer Credit Counseling Service offers ideas to help pay off debts.
Choose a bank that is FDIC insured. FDIC is the Federal Deposit Insurance Corporation, the governmental agency that will insure your account for up to $100,000 in case your bank files for bankruptcy.
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