Merging Finances as a New Couple
“Let us be lovers, we’ll marry our fortunes together,” sang Simon and Garfunkel. It’s one of the most exciting times in a young couple’s life…getting married. After the bridal showers, bachelor and bachelorette parties, vows, cake and the honeymoon, you begin to think about merging your lives together. You make decisions about where you will live, whether you will have the same last name, what you will do with your spare time, whether you want children and/or pets. So many big, important and exciting decisions ahead of you. One of the more complicated things that new couples face is how best to combine their finances.
Looking for tips that can help you merge finances as a new couple and be ready to make important long-term financial decisions? Start here:
Sit Down and Talk About Money
It sounds simple but soon after you say “I do” (or even before!), make a plan to sit down together and discuss your philosophy about money, spending, saving and about debt. Doing this early on in your marriage sets you up for open communication about finances, and helps avoid the common pitfall of having money issues cause problems in your marriage. Being transparent about spending habits, debt and financial goals will help your financial future and your relationship.
After the excitement of a wedding, it is so easy for a newly married couple to accrue debt and live outside of their means without even realizing it. If you both know how much debt you each come into the marriage with (including student loans, credit card debt, car/home loans, etc.), you are much more likely to be able to come up with strategies for paying it off rather than making it worse.
Open a Joint Account
While it might be hard to merge banking accounts right away, it’s a good idea to open a joint account to pay for major monthly expenses like housing, cars, utilities and child care. It’s a great idea to outline a monthly budget for this joint account when you open it so that you can keep your expenditures in check. A joint account is a great first step toward getting all of your income and expenses going in and out of the same place.
Set Aside Money for an Emergency Fund
You never know when something unexpected will happen and you will need to access your savings or emergency funds. One of you could lose a job, you may get injured, or you may need to pay for a home repair or buy a new car. Having money to cover these unexpected expenses will ease the stress and help you and your spouse stay out of debt.
Think About How You Will File Taxes
Once you get married, you have some choices when it comes to filing your taxes. You can file jointly, or married filing separately, depending on your financial situation. As a general rule, most couples come out better when they file jointly. Also, check in with your HR representative after you return from your honeymoon to be sure that your withholdings are correct and that you and your spouse are paying enough taxes. You do not want to get hit with a big tax bill come April 15th!
And if you do encounter tax debt or a difficult tax situation with your spouse, Success Tax Relief is here to help. Contact us today with your questions and let us help you start your new life off on the right foot!