Managing Finances for the Newly Married
It is no secret that money threatens the longevity of many marriages in today’s society. I too was afraid to face the reality and I did not bother with bringing up the subject with my partner. He had a plan to tackle his debt and manage his income and I had a semi-efficient way of managing my personal finances. We had goals and aspirations to buy a home and to travel. Now, we are preparing for the arrival of our first child in April and the many ways our income will be affected. After considering our mediocre credit scores and modifiable lifestyle, I decided that we needed to have the talk.
Communication
Financial experts and institutions will tell you that communication is key to managing finances between two or more people. You need to decide whether you are going to continue to pursue your individual accounts or if you will decide to consolidate your earnings into one joint account. We actually elected to keep our individual accounts, but we also opened up a joint savings and checking account. Any route you pursue should be what is best for you as a team. However, it also should serve a purpose that allows you to achieve your goals and have something to fall back on when there is an emergency.
Consequences
Not effectively having conversations about money caused some concerns that needed to be addressed.
A. We opened up joint accounts (checking and saving), but we only used the savings account. We unfortunately did not maintain the criteria required by the checking account. As a result, we were penalized with a monthly $10 service fee. As of today, we have lost $70 in service fees.
B. Instead of asking each other for help, we would allow some bills to go unpaid because of the lack of sufficient funds. That was a problem because the accounts not being paid had high interest rates associated with them. As of today, we have lost roughly $800 in interest fees.
C. We thought we were on the right path for our goals, but we really weren’t. We were growing our savings by putting back 20% per month. However, we did not have the credit or financial history needed to apply for a mortgage with low interest rates.
D. These situations resulted in anger and disappointment in our marriage that could have been prevented if we had had the conversation long before these problems occurred.
