The ABCs of money and marriage.
To share or not to share, that is the question.
For starters, unless there is a nuptial contract, you will share qualifying assets and debts with your spouse. Don’t worry. You can still create a postmarital agreement after the wedding day if you choose, but remember that you must each be represented by your own lawyer, and full disclosure is required.
A majority of married couples believe in joint finances.
According to a 2012 survey by American Express, most married couples have joint checking (66%) and/or savings (51%) accounts. However, a good number (42%) of those couples also maintain individual accounts, according to a 2014 study by TD Bank, which said spouses’ reasons for keeping individual accounts include independence (38%), convenience (16%), and privacy (7%).1
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 market funds 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. This can mean credit cards debt, student 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. 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 on the accounts with high interest rates. Estimate how long it will take until you are debt free.
- 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, and leasing a car?
- 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 become disabled. (The rule of thumb is to save from three to six months of expenses.)
- 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.