Merging Your Lives and Your Finances
Getting married to the one you love is a huge, exciting step in life's journey. Now that you've both made the decision to share your lives, it's time to think about how to bring your finances together. While creating a plan for merging finances may seem like the antidote to romance, it's crucial to getting your new partnership off to a great start.
Here are some basic tips to help you and your beloved merge your finances thoughtfully and seamlessly.
Decide on Joint or Separate Accounts
For some couples, combining finances into a joint account seems like the simplest, most efficient choice, but others prefer to keep their incomes separate. Setting up a joint account, with regular contributions made by both individuals, can help you work together to cover regular household expenses. You can also keep separate personal spending accounts as one way to maintain a certain level of independence. No matter how you choose to handle your bank accounts, just make sure you're both comfortable with the decision you make.
Determine If You Should Combine Investments
While you may reach your goals faster by combining your resources, many couples choose to keep some autonomy when investing. If you decide to keep some or all of your investments separate, try to keep your spouse's portfolio in mind so that you can keep your investments as diverse as possible. Investing too heavily in one resource can add an unnecessarily high amount of risk to your finances.
Consolidate Insurance and Other Benefits
If you're both employed, take a closer look at all the benefits you both have through your employers. Break down the numbers to see if you'll save money in any way by consolidating insurance policies or by contributing more heavily to one retirement fund than the other. For example, you may discover that you have a health insurance plan with better benefits and a lower deductible, so it may be smarter to add your spouse as a dependent. If you both have 401(k) plans, determine who gets the highest employer match and work toward contributing more to that account.
If you both have separate auto insurance policies, you may want to consider combining your individual policies to see which is less expensive. You may also be able to save by combining cell phone plans, movie rental memberships, gym memberships and other plans as well. Take a look at all your individual memberships and service contracts while setting up your monthly budget together.
Now that you're considering the nuts and bolts of combining your personal finances, make sure that you also take the time to talk about your personal financial goals. Explore our Discuss Your Finances Before Walking Down the Aisle page, as well as our Take the Plunge and Plan for Your Financial Future page, to help create a plan that both of you can feel excited about following.
