I felt like my last blog post sort of left the reader standing on the edge of a cliff. I know I can sound a little pessimistic when it comes to marriage but really I think people need to have more forethought about it. When you get married you aren’t just marrying a person, you’re marrying their family, their successes and failures, and most of all their money.
We know from surveys and years of research that what irks couples the most, and is a topic of the most contention, is money. More couples break up and get divorced over financial disagreements than infidelity. The big issue I see here is control: money is something that has to be conserved and controlled and often this leaks into trying to control your significant other. So how do we marry the finances while keeping the peace? Here are some simple steps.
1. Build a Foundation
When you get married you’re both responsible for the property and assets you own together so you both need to be in the financial loop. It doesn’t matter if one person is really good at this stuff and the other doesn’t really care. All money decisions have to be made together because they affect both of you equally. What if, God forbid, one of you was killed in a freak accident. You better know what bills are due and where your financial life stands.
“My wife runs everything I don’t know any stuff. I don’t know how much money we have. If my wife died I’d have to call her mom and be like, did she ever talk about bank stuff to you? What bank do we go to?” -Nate Bargatze
Don’t let that be you.
2. What’s Mine is Ours, to a Point
In marriage you should absolutely share some things. These things include the expenses that cover your essential needs like your mortgage or rent (if you own a home both your names should be on the title), groceries, daycare, and essential savings like retirement accounts. You will have three different bank accounts: yours, mine and ours. All the money gets deposited into our checking account, then after the essential expenses are paid the extra money goes to your individual accounts. You may agree to divide up the extra money equally or by percentage if one spouse makes a lot more.
The separation of bank accounts is to help avoid disagreements about one another’s spending habits. I know too well from personal experience that trying to reign in someone’s money habits is both soul-sucking and ineffectual. This way you are both free to spend whatever money is left over or save it for a rainy day. You may also choose to have a joint savings account for cash that was given to both of you as a couple, it’s your choice to make if you feel the communication with your partner is strong enough for it.
3. Protect Your Credit
The best way to protect your credit in marriage is to have as little joint debt as possible. You shouldn’t have joint credit cards. The upside of being able to share a credit bill is far outweighed by the credit destruction it could do to you in the event of a divorce. Just get your own credit card and make sure your spouse has access to your financial information. Having separate credit cards doesn’t mean you keep them out of the financial loop. For your joint expenses like groceries you can use the debit card from our checking account or pay cash.
Keeping with this line of thinking, don’t get loans together. Just as you should never cosign a student loan for your family or friends, never cosign a loan for your spouse either. If they bring student debt into the relationship you should encourage them to pay it off soon, because if they die (in a lot of cases) you’ll be responsible for the loan. Same with car loans, don’t apply together or cosign the loan. Your mortgage should be the only debt you really share because you both live there and sharing a mortgage protects your rights to the property in a divorce.