When it comes to relationships, money isn\u2019t usually the best topic for a first date. But, as things get more serious, couples eventually need to decide when and how to merge their finances after marriage. In fact, many couples start planning their joint financial future before they say, \u201cI do.\u201d<\/p>\n\n\n\n
No matter what system you decide to use \u2014 managing your money together, separately, or somewhere in between \u2014 Quicken Simplifi makes it easy to manage your money as a couple.<\/p>\n\n\n\n
Plan your financial future together with Quicken Simplifi. It\u2019s a good idea to talk about merging finances<\/a> before you make a lifetime commitment. While there\u2019s no magic moment when couples must discuss the matter, many financial advisers agree that a conversation should take place well before the actual wedding.<\/p>\n\n\n\n According to Erik Klumpp, a certified financial planner and founder of Chessie Advisors, LLC, \u201cOnce a couple is engaged, it\u2019s a good time to begin discussing how to handle their finances together.\u201d<\/p>\n\n\n\n According to Eric Roberge, a certified financial planner in Boston, \u201cIn most cases, finances are the last thing couples talk about. Unfortunately, it\u2019s usually after they get married. Personally, I recommend bringing up the subject before getting engaged. It\u2019s important to understand the impact of marriage on your finances.\u201d<\/p>\n\n\n\n There\u2019s no right or wrong answer for how any given couple should manage their financial lives, but Roberge suggests at least discussing how you\u2019ll pay for expenses, including how to divide those expenses if you have significantly different incomes. If nothing else, knowing what to expect ahead of time will make things easier as you start your new life together.<\/p>\n\n\n\n On the plus side, merging your money into a joint account can make life simpler, with fewer accounts to manage and more transparency. \u201cBoth spouses can know exactly where they stand financially since both have access to the accounts,\u201d says Klumpp. \u201cCombining expenses also provides a reason to communicate and hold one another accountable for their spending,\u201d adds Roberge. \u201cIt\u2019s very much a team approach.\u201d<\/p>\n\n\n\n But there\u2019s also a downside: Each partner can scrutinize every purchase made by the other. Klumpp also cautions that \u201cit\u2019s easy to take the money and run. Since both spouses have equal access to the money, in many cases, they can withdraw the money with just one signature.\u201d<\/p>\n\n\n\n Deciding to merge your accounts into joint accounts when you\u2019re not married (or before you\u2019re married) also comes with tax implications you might not have planned for.<\/p>\n\n\n\n On the other hand, keeping things separate gives you both more independence. \u201cBut,\u201d adds Klumpp, \u201cif not carefully managed, this freedom could cause concern for the other spouse.\u201d Roberge agrees. \u201cOne spouse might always question what the other does with his or her money,\u201d he says, \u201cadding additional stress to the relationship if these concerns are not communicated.\u201d<\/p>\n\n\n\n Fortunately, managing your money as a couple doesn\u2019t have to be an all-or-nothing approach. \u201cI suggest that my clients create a joint checking account and add a certain dollar amount into that account each month from their personal checking, or vice versa,\u201d says Roberge. \u201cYou can then use this joint account to cover all shared expenses.\u201d<\/p>\n\n\n\n For many couples, a hybrid approach is the best of both worlds. You can take care of your expenses together while still enjoying enough independence to surprise each other for Valentine\u2019s Day. It can also help keep the spark of dating alive by creating a way to give each other gifts that don\u2019t feel like you\u2019re just spending your joint money.<\/p>\n\n\n\n Whichever direction you choose, a joint savings account for married couples can help you work together toward your long-term goals.<\/p>\n\n\n\n Simplifi works with any system: together, separate, or hybrid. Even if you\u2019re both smart with money management, you still might disagree, at least at first, when it comes to your long-term priorities. For example, one of you might consider buying a house to be a higher priority than saving for retirement. The other might feel the opposite.<\/p>\n\n\n\n Certified financial planner Craig Schmith says typical goals you might need to work out together include saving for college and retirement, buying a new house, or changing careers.<\/p>\n\n\n\n Talking about money can feel awkward, but it doesn\u2019t have to be that way. Consider it just another aspect of getting to know each other. One way to start the conversation is for each of you to draw up a list of short and long-term goals, then compare your lists.<\/p>\n\n\n\n Talking about why you each feel the way you do can help you get to know each other on a deeper level. Did your parents struggle to go to college? Did you spend your childhood in urban apartments, wishing you had a home with a yard to play in? As you discover the feelings behind each other\u2019s reasons, you can decide together which items to prioritize.<\/p>\n\n\n\n Usually it\u2019s not a matter of choosing one or the other\u2014say, house or retirement\u2014but how much you can and want to spend on each. Schmith says he often gives clients a matrix with more than a dozen options.<\/p>\n\n\n\n If the breadwinner is looking at a job change that cuts her salary, for example, the matrix can show the consequences of a 10 percent, 20 percent, or 50 percent cut. Multiple options give you more flexibility in negotiating a plan you can both live with.<\/p>\n\n\n\n Once you set your mutual goals, try scheduling regular meetings to talk about your progress. If problems crop up, it\u2019s usually better to talk about them than hide them. \u201cI encourage people to be on the same page\u201d when planning, Schmith says.<\/p>\n\n\n\n Track your goals together in Quicken. Want some guidance for discussing those long-term goals? Here are 10 questions to ask each other on your next financial date. It might not sound romantic, but then again, arguing over money management is one of the biggest causes of marital tension. An open, honest talk about your finances could be just what Cupid ordered.<\/p>\n\n\n\n \u201cFinancial dates are a great way for couples to set priorities, build trust and increase marital bliss,\u201d says Jennifer Openshaw, chief executive of FamilyFN, a Los Angeles, California company that provides financial advice. \u201cProbably the biggest mistake couples make is not talking about money management. It\u2019s really about setting aside time so you can both plan for your hopes and dreams.\u201d<\/p>\n\n\n\n This question is the best way to start a money conversation, says Openshaw.<\/p>\n\n\n\n For example, does one of you want to go back to school, start your own business, or buy a vacation home? If you plan to raise a family, how many children and when? Would you both continue working, or would one spouse want to quit and stay home with the kids?<\/p>\n\n\n\n Discussing your hopes and dreams together will help you set priorities and identify savings goals.<\/p>\n\n\n\n Before you can create an effective strategy to reach your goals, each person should fill out a net worth worksheet, detailing their assets and liabilities. Once you know where you stand right now, it\u2019s much easier to move forward.<\/p>\n\n\n\n Also, if you haven\u2019t discussed it already, engaged couples might want to discuss a prenuptial agreement (prenup) to decide how assets would be distributed in the event of a divorce. If either of you owns a home or has investments, owns a business, plans to support the other through school, or has children from a previous marriage, a prenup might be worth the time and effort.<\/p>\n\n\n\n If you think a prenup might be right for you, be sure to broach the subject with your partner as soon as possible, giving you both time to digest the idea and move forward together, well before the wedding.<\/p>\n\n\n\n Some couples relish the unity and trust that joint accounts foster, while others prefer more freedom and autonomy by maintaining separate accounts. Or, as discussed above, you can have both\u2014setting up a joint account for household expenses while keeping separate accounts for personal spending.<\/p>\n\n\n\n The key is to find a system that works for you. Make sure you consider your individual money management styles. If you\u2019re a saver and your partner is a spender, for example, you might find managing an all-purpose joint account too nerve-wracking, and opt for a combo approach or separate accounts entirely.<\/p>\n\n\n\n Whether or not you choose to combine your investment accounts is, again, entirely up to you. You can\u2019t open joint IRAs or 401(k)s, but you can change the beneficiary information to name each other.<\/p>\n\n\n\n Nevertheless, it\u2019s important to view your portfolios as a whole to make sure you aren\u2019t overlapping. Even if you don\u2019t combine your accounts, you might want a way to track them together<\/a>.<\/p>\n\n\n\n One of the first tasks newlyweds should tackle is creating a budget. Sit down together and plot out how much you expect to spend on groceries, clothes, eating out, and other household expenses.<\/p>\n\n\n\n Remember, budgeting isn\u2019t about depriving yourselves. It\u2019s a financial tool that can help you reach your goals.<\/p>\n\n\n\n You should also take this time to discuss other spending guidelines, such as how much each of you should be able to spend without consulting the other. You probably don\u2019t want to discuss every $5 purchase, but you don\u2019t want to come home from work and unexpectedly find a new Mercedes in the driveway either.<\/p>\n\n\n\n If you\u2019ve had trouble budgeting in the past, using a tool like Quicken Simplifi<\/a> <\/a>can make things a lot easier, especially when you start budgeting together.<\/p>\n\n\n\n In Kiplinger writer Erin Burt\u2019s home, she\u2019s the chief financial officer. She and her husband both contribute to cover the bills, but Erin\u2019s the one who physically writes the checks, rebalances the portfolios, and hashes out the taxes. She\u2019s more organized than he is, so the task naturally fell to her, although you might find that splitting the duties works well in your own relationship.<\/p>\n\n\n\n Erin\u2019s arrangement doesn\u2019t mean she leaves her husband in the dark, though. They have a date every month to go over the budget, review their saving strategies and progress, and discuss upcoming expenses, such as vacations and big-ticket purchases.<\/p>\n\n\n\n No matter who ends up handling the bills in your marriage, make sure each partner knows where to find all the different account information, including websites, passwords, and bill due dates in case the other person ever needs to take over these responsibilities, even temporarily.<\/p>\n\n\n\n One of the biggest culprits in marital money management fights is a mismatch of risk tolerance, says Jonathan Rich, author of The Couple\u2019s Guide to Love and Money<\/em>.<\/p>\n\n\n\n \u201cA lot of life\u2019s most important decisions involve weighing risks,\u201d Rich says. \u201cFrom investing strategies to career moves, if one of you prefers to take bigger risks in hope of bigger rewards while the other is content to play it safe, you could each end up resenting the other for his or her carelessness, or for holding you back.\u201d<\/p>\n\n\n\n Test your risk tolerance to see where you both stand. If you\u2019re on different ends of the risk spectrum, don\u2019t even try changing your spouse\u2019s point of view\u2014it won\u2019t happen. Instead, try to compromise on financial strategies that both of you can stomach.<\/p>\n\n\n\n Adding a spouse to your health insurance may be cheaper than maintaining separate plans. Consider your specific health needs, then weigh the costs and benefits of each person\u2019s plan to make your decision.<\/p>\n\n\n\n Combining your auto insurance will probably also save you money, and you\u2019ll want to make sure you have enough homeowner or renters insurance to protect your combined possessions.<\/p>\n\n\n\n And what about life insurance? Do you need it? If you already have a policy, either privately or through an employer, do you need to change your beneficiary information?<\/p>\n\n\n\n Be sure to take a full inventory of your insurance needs and make these decisions together.<\/p>\n\n\n\n The good news is that marrying a person with bad credit will not drag down your stellar record. If you apply for a car loan by yourself, for example, your spouse\u2019s credit report won\u2019t even enter the picture.<\/p>\n\n\n\n But when it comes to applying for joint financing\u2014say, you plan to buy a house together\u2014lenders will consider both histories. Talk about any potential problems ahead of time so you can create a realistic plan to get any loans you might need on the best possible terms.<\/p>\n\n\n\n One thing you and your partner can both do is to examine your credit reports, look for errors, and fix them. Then, if there\u2019s room for improvement, come up with a plan to boost your credit score<\/a>.<\/p>\n\n\n\n Make a pact to pay off your debts, starting with the balances that carry the highest interest rates. You may choose to work individually or collectively to pay off debts you accrued before the wedding, but don\u2019t add each other\u2019s names to your obligations.<\/p>\n\n\n\n Also, consolidating your own student loans to lock in low rates is a good move\u2014but, again, don\u2019t merge your loans with your spouse\u2019s. There\u2019s no good reason to add each other\u2019s existing debt to your credit records. It can only hurt your credit scores, and if one of you were to default, the other would be left holding the bag.<\/p>\n\n\n\n No matter how you decide to handle your finances, says Schmith, \u201cUltimately you need to be in it together.\u201d<\/p>\n\n\n\n
\nLearn more \u2192<\/a><\/p>\n<\/div>\nFor love or money: how should you manage your money as a couple?<\/strong><\/h2>\n\n\n\n
When should you talk about budgeting as a couple?<\/strong><\/h3>\n\n\n\n
Managing your money as a couple or separately<\/strong><\/h3>\n\n\n\n
Consider a hybrid option<\/strong><\/h3>\n\n\n\n
\nLearn more \u2192<\/a><\/p>\n<\/div>\nDiscussing your long-term financial goals<\/strong><\/h3>\n\n\n\n
\nLearn more \u2192<\/a><\/p>\n<\/div>\nTen questions to ask when managing your money as a couple<\/strong><\/h2>\n\n\n\n
1. Where would you like to be in five or ten years?<\/strong><\/h3>\n\n\n\n
2. What are our assets and liabilities?<\/strong><\/h3>\n\n\n\n
3. Should we keep our finances separate or manage our money as a couple?<\/strong><\/h3>\n\n\n\n
4. What about our investments?<\/strong><\/h3>\n\n\n\n
5. How will we handle daily spending decisions?<\/strong><\/h3>\n\n\n\n
6. Who will be responsible for paying the bills and preparing the taxes?<\/strong><\/h3>\n\n\n\n
7. What\u2019s your tolerance for financial risk?<\/strong><\/h3>\n\n\n\n
8. What are our insurance options?<\/strong><\/h3>\n\n\n\n
9. How does our credit report look?<\/strong><\/h3>\n\n\n\n
10. How will we tackle existing debt?<\/strong><\/h3>\n\n\n\n
Figuring out how to get there with Quicken<\/strong><\/h2>\n\n\n\n