5 Steps to Combining Finances

It’s September so you might have thought that the summer of wedding blogging was over . . . think again! Vows have been said, cakes cut, and dance floors dominated by my awesome moves but I have not run out of financial advice to give. I’m back in wedding mode to talk about one step of wedding preparation that’s not as glamorous as dress shopping or cake tasting, but is equally important – combining your finances.

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Money is a very personal subject for most people, which is why beyond determining who pays for dinner, a lot of couples avoid the subject. But your financial history, accounts balances, and spending habits strongly influence decisions you’ll make as a couple. Everything from big questions like where to live or if you want to have kids all the way down to the small stuff like what’s for dinner is impacted by your money habits; the sooner you start talking to your partner about your financial life, the better. So here are 5 steps to take to start combining finances with your spouse-to-be:

  1. Start Talking –  Set up a time and place to have the first money conversation. Give yourself at least an hour of uninterrupted time so you can talk in depth. It’s like a date but with bank statements instead of flowers. If you think it might be helpful, invite a third party like a counselor or a financial planner to help mediate. Money can be emotional, so there’s no shame in asking for some outside help. If things get heated, take a break and come back to it another day. The important thing is that you open lines of communication with each other so you can start approaching your finances as a team. You might be surprised by what you didn’t know about your partner’s financial life.
  2. Ask These Questions – There’s a lot to cover when it comes to money. Maybe you’re a financial guru who comes to the table with a laundry list of things to talk to your partner about. Or maybe you’re sitting there with no idea what to ask or how to start sharing. Never fear, Kelsey’s here . . . with a list of questions you’ll want to you ask each other during that first conversation:
    1. How much do you make?
    2. What debts do you have?
    3. What investments do you have?
    4. What financial institution(s) do you use? How many accounts do you have?
    5. Where does your money go each month? What bills, payments, etc. do you have?
    6. What are your financial priorities?
    7. What financial goals do you have? Short term and long term? As individuals and as a couple?
    8. What is your money style? Are you a saver or a spender? Do you have any money hang ups?
  3. Pick Your Style – You had your own money-style as a single person, but now you’ll have to determine what your style is as a couple. There’s no single best way to combine finances with your partner. It’s about figuring out what will work best for the two of you. Just remember that whatever money-management system you agree upon, your decisions will now affect not just you but your partner, as well. Here are some different ways couples commonly combine finances:
    1. What’s Mine Is Yours – Where you have one joint account and share everything.
    2. Yours, Mine, and Ours – Where you have a joint account for joint expenses (like rent, insurance, Netflix, etc.) but each maintain your own personal accounts for individual expenses. The trick to making this work is determining how much each partner will contribute to the joint account each month.
    3. A la Carte – Where you keep your finances separate but each partner picks certain joint bills and expenses to pay for.
    4. In Love as Individuals – Where you keep your finances completely separate.
  4. Ch-Ch-Ch-Changes – Getting married changes more than just your last name, although if you are changing your name you’ll want to be sure you do so on all important documents, credit cards, and accounts. You also might want to change the beneficiary on things like your retirement accounts or insurance policies to your spouse. Most married couples also chose to file their taxes jointly, which means you might also want to make some changes to your payroll with holdings. Additionally, once you open a joint account you might need to change things like your direct deposit, automatic withdrawals, or payments that are set up on your debit card. Be on the lookout for things that might need updating as you go along.
  5. Keep the Conversation Going – Now that you’ve got the ball rolling, don’t let it stop. Continue talking openly and frequently with your partner about your finances. Set up a time to meet once a month to go over your accounts. Look at where your money went last month, if you met your goals, and what’s coming up this month for bills. Make these dates fun by ordering takeout or making drinks. As you start a new life together, new money questions are bound to pop up. If you have an established system for talking about those new challenges, they’ll be so much easier to tackle together.
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