Money and marriage (cont'd)
So, we continue to look at this very troublesome matter of money in marriage and, hopefully, some of your questions will be answered. Sounds like you are either getting married or having difficulty resolving money, so here goes.
Should you combine your assets or keep them separate? There is no right or wrong answer here. Some couples maintain separate bank accounts, have designated certain expenses that each are responsible for, and pretty much operate under the mantra "what he/she does with his/her money is his/her own business." Others prefer to function with joint accounts, with one or both partners overseeing all financial obligations. I believe that all couples should have at least one joint account, and allow your spouse to be privy to all other transactions.
What about financial goals, whether short or long term? As you prepare to start your life together, you will need to establish your priorities as a couple, as opposed to as individuals. Your monthly budget is a way of discovering what is most important to you as a value. What are you willing to cut back on so that you can afford to purchase something worthwhile or take a much-needed vacation? What's the bigger priority; ensuring your budget includes weekly shopping trips to the supermarket, the newest clothes or electronic gadgets, or saving up for your first home or paying your cell-phone bills? What about those longer-term goals, such as paying for your future children's needs and wants (preschool tuition and clothes to cover their ever-growing bodies), the cost of higher education, etc? Do you plan on paying their way 100 per cent, just covering tuition, or making them earn their own way through college with scholarships and jobs? You have to decide.
When do you talk about your budget? Just because one or both of you have taken on the responsibility of handling financial matters within your relationship, you still need to get together and talk about it. It doesn't need to be a three-hour long professional-level budget meeting (we all know that would never be sustainable!). However, a quick update or 'touch-base' with each other on how you are doing with sticking to your monthly budget, any significant progress or roadblocks with relation to your short-and long-term goals, etc, will go a long way towards solidifying your financial relationship and situation.
What are your savings plans? While many new couples today don't believe that having a savings plan is necessary, especially with many living from pay cheque to pay cheque, as it almost always is when just starting out, savings is a very important part of your financial plan. Nobody is invincible, and if you think that you or your significant other have a perfectly secure job and that nothing could happen, think again. There is a very good chance that one or both of you will be impacted by job loss at some point in your careers at least once. It's important to have about three to six months of savings tucked away for when the inevitable occurs.
Discussing finances before or after you walk down the aisle removes one problem you're sure to encounter.