Marrying Money, Part 2
March 31st, 2008 | by rachel |
In Marrying Money, Part 1, I presented 7 ways for couples to be more effective in their money management. All of those ideas deal with things that can be addressed before money is combined. After the ceremony, though, there is still plenty of work to be done. In fact, much of learning to manage money within a marriage is “on the job” training. Before the honeymoon ends, these tips will help you make the transition from single to married without too much turmoil.
The most important aspect of managing money as a married couple is that you do it together. To that end, the first thing you should do is create a process for making and implementing financial decisions. It can be as simple or detailed as you want. Just make sure it contains input from both you and your spouse and that it is something you are both comfortable with.
Be flexible about banking structure. Will you use joint or separate checking accounts? Will your savings and checking accounts be housed at the same bank? Will you utilize direct deposit? Are the bank locations convenient to your home and work? Your finances and your marriage are unique. Make sure your banking structure addresses the most important elements of both.
One sure way to get into relational and financial trouble is to make a money decision without getting all the information you need. No matter what, don’t rush financial decisions. Take the time to understand what you are doing with your money and to be comfortable with all aspects of the move. You can always give money away but you can’t always get it back if you give it away too soon!
Allow for “mad money”. Everyone needs to be able to blow some cash, no questions asked. Make sure your budget includes some money for each of you that can be spent on anything, anytime, anywhere.
It’s vital for both partners in a marriage to be involved in all elements of the finances. If your marriage is like many others, one of you will end up “paying bills” and the other will be tempted to abdicate financial responsibilities (other than making money, of course). Regardless of which role you have, understand that writing checks is not, necessarily, the same thing as managing money. Both of you need to be involved in deciding where the money goes. The person that sends it on its way shouldn’t shoulder the majority of responsibility for your success or failure.
Especially for couples that marry later, collaboration on spending limits and processes can feel like a loss of freedom. To keep resentment from building in that situation, identify a spending cap. Then agree not to spend (for any reason) more than that amount without consulting your spouse. Having that cap in place will, undoubtedly, prevent misunderstandings down the road.
For the most part, your monthly income will be allocated in your monthly budget. Those day-to-day expenses will include housing, food, clothing, transportation, etc. To achieve long-term financial goals, you should plan for spending inside and outside the budget. Find a way to accumulate money not allocated in your monthly needs to fund the things you will want to do later in your marriage. Not only will those funds be good for children’s college, weddings and retirement expenses, they will be a great cushion for the variety of unexpected expenses you will confront during your marriage.
With a little luck and lots of hard work, you can experience a long, happy, fulfilling marriage. Marrying money the right way will be a big part of any success your marriage enjoys. Best wishes!