Salary, savings, debt
If you haven’t already, it’s time to be honest and talk about your current financial situation. You don’t want to be blindsided in the long run and be in financial trouble. Tell each other your exact salary, credit score, income from side jobs, debt, savings, and assets. Be even more specific and discuss your spending habits such as how you spent your money the previous year, any big purchases, and how much you spend in a typical week. Having a “money talk” might seem like an obvious discussion to have, but a TD Ameritrade survey found that more than 40% of couples did not know how much their spouse made. Some couldn’t even guess the correct number within a $25,000 USD
margin of error.
Get rid of debt together
Although your spouse’s debt shouldn’t become your responsibility when you get married, it does
affect your future life decisions together - especially when it comes to purchasing a home,
booking vacations and retirement savings. It will be hard to make purchases or save up when
one person has bad credit or bad spending habits. Work as a team and make it a priority to
create a budget together. Cut unnecessary luxury spending like eating out daily or your morning
run to Starbucks. Pay off loans with the highest interest rates first or completely pay off your
smaller loans first to build momentum. If you have multiple loans, consolidate debts into a
personal loan so you only have one monthly payment to make.
Figure out a system to manage money as a couple. Some spouses use a joint savings account to split bills and some keep their accounts separate. Either way, make sure to be on the same page and be open to various bill paying options if your partner uses a different method to make payments than you do. If one partner earns significantly more than the other, find a way to divide expenses that makes sense, such as splitting the costs based on a certain percentage of your income. Another idea is to divide your expenses. For example, one person pays for your rent, and the other pays for your utilities. The last thing you want is one person maxing out his or her credit cards and struggling to pay their share of bills. Be flexible in sharing expenses and communicate with each other when you’re not able to.
Are you a spender or a saver? Either way, don’t commit financial infidelity by making secret purchases without telling your spouse. A study from CreditCard.com found that 20 percent of married couples made a purchase of at least $500 USD without telling their spouses with six percent admitting to having a separate bank account the other wasn’t aware of. It’s great to be able to spend independently, but keeping secrets won’t do anyone any good. Communicate expenses and share passwords with each other so you can both view online what your financial situation looks like. You don’t have to tiptoe around each other when you want to make a purchase but there should also be a balance of wants vs. needs items.
Ask for help
If you feel that you’re at a dead end and your conversations about money aren’t productive or helpful, seek help from an outsider. It’s okay to ask a financial adviser, coach or accountant for help when managing your finances - single or married. Seeking a professional’s opinion might ease tension if you often argue about finances. An accountant or financial expert can help with complicated money matters such as investments and taxes, and they will also save you time in the long run. You will need to pay for such services, but depending on your current financial situation, they may be able to save you money in the long run, in addition to saving you stress, time and disagreements. Discussing money in a marriage can be tricky or even downright uncomfortable, but it starts with open and honest communication. With the right money management skills, spending habits, and patience, you will be on your way as a team to overcome any financial situation.