You’re married, congrats! The champagne has settled, guests have headed home, and you’ve been eating leftover cake for the past few days. You also have a stack of cash and checks to show for the big day.. but what do you do with it? While many couples may have been together for some time before getting married, deciding what to do about finances is a whole new ball game. Now I’m no financial advisor, but after being married for a few years and discussing with others, I wanted to share my advice on what I’ve seen work well.
First of all, it’s 2016 and things have evolved a lot as far as courtship and living situations from where they used to be. These days, it’s much more common to be living with your significant other before getting married (potentially even having bought a house together), and couples are also waiting longer to get married. These factors have changed the landscape pretty dramatically, and because of them I could maybe re-label this post “couples finances” instead of just marriage, so take it however you would like!
My husband and I moved in together shortly after getting engaged and that is also when we opened our joint checking account together. Between rent, groceries, utilities, home supplies, etc. we figured we would just save ourselves a lot of math, bank transactions, and/or swapping checks back and forth by going in together instead of trying to divide things out. We’ve maintained the same practice into our marriage. In addition to our joint account, we each have a personal checking and a personal savings account. We get paid from work directly into our personal accounts, and then transfer the same amount every month into the joint account. 90% of our bills are paid out of our joint account because we put as much as possible on our joint credit card (more on this later) that is paid off immediately. Small amounts are left in our personal accounts for month payments such as car loans, savings account deposits and IRA deposits.
As I said, we also have a joint credit card, which is our only personal credit card. We use the Capital One Venture Card, which I highly recommend for travel rewards. We each carry our own card that ties to the same account and the rewards are a minimum of 2 miles for every dollar spent. We’ve already used it to pay for two vacations in the past three years! As I said, we put anything we can on the credit card, but also have a set monthly budget, so we are able to pay it off right away without having to worry about interest. Speaking of budgeting – DO IT. With apps out there like Mint there is no excuse not to. People are always afraid that setting a budget will restrict them more than they want to, but really it just allows you to do all the things you want, and realize easier what you can cut out. I’ve got a $25/month coffee shop budget because I know I’ll want it, and then I don’t feel guilty when I do get a latte a week.
Also, speaking of credit cards – when you get married remember that you are married to everything about one another, including credit scores and debt. Hopefully you already know this and have a good understanding on where each other is at. On anything you apply for together, keep in mind that the lower of your two scores will always be the one used. The main thing this tends to come into play for is purchasing a home.
All of this is just my own opinion and what works for us, but there are many other ways to do things. Some people prefer to keep things separate, and maybe one person pays rent/mortgage while the other pays the remaining bills. I completely respect those who want to keep things separate, but I just suggest that you have good reasons and have an important conversation with one another as to why you are doing it that way. If it is a trust or security issue, that’s possibly a bigger conversation you need to have together first. If it’s just out of convenience or laziness however, I’d strongly urge you to consider the joint route (which after the initial setup tends to be much more convenient on your relationship).
Once you are comfortable with your mate and trust one another enough, there is also no right or wrong time to potentially go in on things together. I know couples that started a joint account before they were living together, but maybe had been together a year or two and were comfortable with each other’s finances. Many people these days buy houses before getting married and that is also obviously an in-depth process to evaluate together. No matter what, it’s your money and you need to do what you are most comfortable with.