Financial discussions with your spouse or partner can be a heavy subject, especially for those couples who don’t share the same financial habits. Whether you’re newly married or have been married for a number of years, it’s important for both partners to be on the same page when it comes to the family budget and how the household money will be handled. After experiencing this myself earlier this year, I have listed a few things I’ve learned about combining finances in marriage.
Be on the same page: Regardless of what you come up with as a family, it’s extremely important for both partners to be of the same understanding about the budget, how the money is spent and the goals you are both working toward. Just as with everything else in marriage, you have to work as a team toward a common goal for your family.
Make bank account decisions: My husband and I decided to fully combine finances, meaning we have total visibility on each other’s bank accounts and credit cards. This may not be for everyone, and that’s OK. First, you must decide whether you are going to have a joint bank account or if you will each have your own accounts and one joint account for household expenses.
Set rules: Joining finances doesn’t mean that you should lose your privacy or have to ask before you make a purchase. One good rule is to set a dollar limit and if one person wants to make a large purchase over that dollar amount, they must talk to their spouse about it. This could even be as small as purchases over $100, but it reinforces the idea that the money is household money; and large purchases affect everyone in the household.
50/20/30: The 50/20/30 rule is the rule we follow in our household, and I believe it’s one of the easiest ways to set a budget. Fifty percent of your income goes to needs like the mortgage and groceries. Twenty percent goes to savings, and 30 percent goes to your wants. This is an easy way to keep the household spending under control without having to stress about each and every dollar you and your partner spend.
At first, combining finances can seem scary and it can be hard to feel like you have to answer to someone else, if that wasn’t your norm before marriage. If you and your partner can get on the same page spending-wise, it will create household harmony and a happy marriage.
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Allison Baines, Wealth plan design specialist at oXYGen Financial. Co-host of “They Don’t Teach You This” podcast. Connect with her at email@example.com.