When a couple decides to get married, it represents two people coming together to share a life together. However, it doesn’t mean that they have to share everything equally. Let’s take a look at some of the different ways that couples can handle their finances after their wedding day.
Separate Accounts May Be Ideal:
These days, people are getting married at an older age. This means that they may have money in a bank account or some other separate asset that may need to be maintain. By keeping cash in a separate account, it makes it possible to protect both the cash itself as well as the asset that the money may be used to maintain. In many cases, if joint funds are used to repair or upgrade a separate property, those funds may be considered to be commingled.
How Should Couples Divide Their Joint Bills?
Typically, couples will continue to pay their own bills while contributing funds to pay joint bills. However, it isn’t always necessary for a couple to divide joint expenses in a 50/50 manner. If one spouse makes more than the other, that person may be best equipped to pay a larger share of joint debt. The spouse who makes less money may be tasked with paying for groceries or saving up cash for a weekend getaway together.
Money Should Not Equal Power:
When deciding how the household will operate financially, be sure that neither side equates money with power. In other words, the person who pays the majority of the bills shouldn’t automatically get the ability to make the majority of the decisions.
In fact, it may be a good idea to create an agreement that determines which choices are to be made jointly and which can be made solely by either party to the relationship. Ideally, the agreement will be made with the understanding that any money earned during the marriage is joint money unless otherwise stated.
Be Transparent About Your Financial Situation:
Regardless of how you choose to split your finances, be sure that you are open and honest with your partner at all times. If you have gambling debts, credit card balances or other financial issues, you should not hide them. Ideally, each party will allow the other to read their credit report at any time. By being honest about your finances, you and your spouse can work to remedy the issue or make plans to work around it.
As with anything that takes place during a marriage, determining how to split your finances takes communication and compromise. If you are ever uncomfortable about how your money is being managed in a relationship, don’t hesitate to speak out as opposed to letting the issue fester.
Edward Schinik has been with the Investment Manager since 2009 and has been with one Affiliated Investment Manager since 2005.