What you need to know about finances after marriage
Published 03/17/2022 | Last updated on March 17, 2022
Before starting life as a couple, experts recommend discussing income and the debts that each one brings to the relationship.
Money management is such a controversial issue in some couples that it can even become the trigger for the end of the relationship.
Although there are laws that regulate the distribution of resources when couples separate or divorce, there are no rules on organizing family resources when two people decide to live as a couple or get married.
The first thing experts recommend is to talk directly about the subject. That implies not only asking about the other's income but also about their debts.
In the end, the debt load of the other person will end up influencing the family economy.
How much should each contribute?
Deciding how much each will contribute to financing life together is a challenge. Many prefer the idea of "50/50" or "half and half," but the problem arises when incomes are very disparate.
According to the American financial adviser Maggie Germano, founder and executive director of the consulting company that bears her name, the most logical thing is that the individual contribution is related to the level of resources that each one contributes.
A different formula may work for each couple. For this reason, it is recommended that the contribution to everyday expenses be proportional to the income that each one has. From that perspective, dividing everything in half could hurt the lower earner.
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Putting the balanced contribution formula into practice is not that complex, but you have to organize the accounts to calculate the percentage each should contribute to the common fund.
This percentage can be calculated for each expense, or even easier, distribute which bills each one will pay, following proportionality. For example, one takes care of the rent and the supermarket, while the other takes care of other equivalent expenses.
The surplus challenge
With all financial commitments paid, some couples have surpluses to save or invest. In those cases, should it be individual or shared savings or investments? This decision is not always easy.
The one who has more income and contributes more to the couple's "business partnership" can argue that the remainder is his or her.
But from another perspective, a couple may decide that "the contract" to live together involves sharing everything.
The challenge is to agree. And it should be done before concluding life as a couple. Experts recommend saying what you think clearly and not hiding relevant financial information.
You may be interested in reading our article Is it better to save or invest money?
Tips for better finances in marriage
There is no universal manual to manage household finances correctly or manage your money and that of your partner efficiently. However, planning can be how everyone should follow to make the difference between living in conflicts due to bad debts and being calm for having an organized economic life.
It's essential to align your financial priorities with your partner's and work together to address each. Follow each tip step by step and meet your joint goals.
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Clear beads
Set a budget for your own and collective income and expenses. Consider rent, household expenses, debt payments, savings, and extra expenses.
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Planning
Sit down with your partner and establish a strategic plan that includes individual and joint goals, set deadlines, responsibilities, economic obligations, and assign equitable duties. While one pays the rent or the mortgage loan, another pays in charge of public services. Become an ally of money and do not allow it to be a reason for conflicts with your partner.
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Identify your partner's financial habits
Pay attention to the fulfillment of their responsibilities and the way they manage their debts. This tip will allow you to discover the shortcomings you have in this area and work together to overcome them for the couple's benefit.
If one of you is a saver and the other is a spender, create a balanced budget that allows for both.
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Not everything involves money
Create savings habits in your daily life. You should not always have the most expensive and do activities that involve high costs. Learn to enjoy the little things.
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Make a contingency fund
Within your budget, allocate a fixed monthly percentage for unforeseen events. Sometimes, expenses that are not planned arise. You may be interested in reading our article What is an emergency fund?
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Patience and persistence
The anxiety of fulfilling dreams, many times, does not wait. But keep calm, work saving to have a lasting heritage, and always before making a financial decision, consult it with your partner, evaluate pros and cons, how you will pay and meet debts, and how long it will take you to get out of them.
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Communication
Couples should build trust to talk about everything: their plans, wishes, and concerns. You must not allow finances to become a taboo subject in your relationship. Talking about what you want in terms of finances will help you define your personal goals and your goals as a couple. It is fundamental to establish priorities and project what you require to materialize your ideas as a couple.
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Secure heritage
Prevention is crucial to protect assets and, of course, your family. If you have insurance of any kind, ask how you can make it a couple or family option. Likewise, if you are acquiring goods, think about the future and insure them. The initial investment will be justified with your peace of mind and protection in case of unforeseen events.
At El Paisa Multiservices we want to help you with your finances in Hartford, CT. You can contact us if you have questions about our services.
By Ingenuity & Solutions
