Post # 1
My FI and I know we need to talk about our finances and how we want to handle them. Up until now, everything has been separate. We do live together now, but I just pay a monthly amount to chip in for the rent, utilities, and so on. We don’t really know if we want this to be the same setup we have after we’re married. So – we are setting up a date for Finance Night next month to start discussing how we want to handle our money leading up to and after the wedding.
Does anyone have any advice for this? Even just knowing what areas we need to make sure we cover would be helpful, and if you can give examples of how you and your SO/FI/DH handle things, even better. Also, if you have any tips for how to have a smooth, relaxed conversation about this instead of an awkward, tense one, please share them too!
Post # 3
first, congrats on discussing finances prior to getting married. I know a few couples that did not talk about this at all prior to and it caused alot of stress.
second, you guys need to make a list of what money comes in and what bills go out every month. Once you have determined this you guys can set up a monthly bill/funstuff budget.
Thirdly, if there are any debts either of you are bringing into the relationship that needs to be dicussed.
There are so many different options you guys could to.
Seperate accounts, Seperate with a joint account for bills, or just one joint account.
Post # 4
we are going joint account but that is what works for us – i made it a point when FI and i got serious to let him know my finances (its something i struggled with in other relationships -miss independent over here) but i told him everything, my debt (which is just my car thank god – he has some studen loans) my income, my credit history. i didnt want there to be any scary secrets when we got to this point. and it feels wonderful so i commend you on taking the time to sit down and talk about it – the one thing i dont think we will fight over is money (saying my prayers) but it seems to be the most solid thing we can agree on which makes me so happy becuase my parents tend to fight about money (they have been happily married 37 years, but money is the one thing they will go back and forth on)
Panterapeach has some great advice i would start with taht.
Post # 5
I agree with the PP. And good for you two for realizing this is something to discuss before the big day (and the new big bills!). There are some classes available through community programs or churches that cover different topics each week, that could be a good place to start and have ‘guided discussions’ on topics you may not have even thought to consider.
I think the most important thing is to decide how your household budget will operate…setting $ aside in advance vs tackling bills as they come up, who’s in charge of paying when it comes down to it? (did you not pay the phone bill or is he the one who’s supposed to send the check out in the end, etc).
Important topics: rent, monthly bills/payments (mortgage, car, utilities, etc), unexpected expenses (injuries, car accident, etc), spending money/fun purchases (how much per person/month, etc), what is the biggest purchase one spouse can make without checking with the other (a $150 pair of shoes? a $600 tv?), and also include at least one discussion about life insurance and how to access each others financials in case of a death. And the ‘in general’ discussion of what your financial goals are….owning a home, paying off student loans asap, paying for kids college and weddings or letting them do that themselves, etc.
Sorry that’s long, I just got on a roll, and it’s good to think about b/c FI and I need to hit a few more of these topics soon as well.
Post # 6
We sat down too and honestly it has made our financial life a lot easier. Our first conversation was “Who” we talked about if one of us would handle it or if both of us would handle it, etc. By handle I mean pay bills related to us together (rent, electric, cable, groceries, etc), then how would we handle seperate bills (car payments, credit card debt, student loans, etc)
The hardest conversation was do we share money to pay off the others debts prior to each other. For instance DH had credit card debt and a student loan. I have no debt and am obsessed with not having it. I also make more money then DH, So I needed to decide was it important to pay of his debt for our future even if it meant using “my” money and was he ok with that from a pride prospective.
I ended up handling all our finances. This includes managing our credit reports. I created a spreadsheet with all of our regular bills and then a section for credit cards and had it add them up per pay period. So for instance (will use round numbers) on week 1 DH and I make $2000 we have rent due and a car payment that totals $1000. Then we each get allowance (yes I said allowance then their is no arguing. It gets seperatley direct deposited into our own bank accounts and is seperated from our joint account. I can buy shoes and coffe with my allowance and he can buy video games and fast food) We then take money out for weekly groceries. Then half of what’s left of the money goes to debts and half to savings.
Sorry I gave you our plan, but it works for us and may help you with your ideas.
Post # 7
I think with conversations like this, it’s always best to get the ’emotional’ stuff on the table first – ie what are your fears around merging finances? what are his? A lot of times people come to the table locked and loaded with their defenses up (“she’s not going to get my money!” “he has to help take care of me after we have kids!”) – sometimes without even knowing it.. and those conversations can become tense with seemingly no reason why. I think if you guys can start out with a really open communication about WHY this is hard for you, and help each other to feel safe about discussing what scares you, what you need etc., you build a great foundation to discuss the actual logistics part.
Good luck! 🙂
Post # 8
bring paperwork! all of your monthly bills, paystubs, bank account statements, debt, etc.
these conversations are a necessary evil, but they can be SO helpful. try not to get too emotional or angry or whatever. focus on making smart decisions together.
Post # 9
we already had a house before being married so we had already done a lot of the finance talks…. but once we got married we opened up a joint savings account (we like to keep our checking accounts seperate, but we have no problem with each other using eachs atms ect) and we also went through to see what was the best rate for things like car insurance, health insurance ect, in each others names. DH is older than I am so he gets a better car insurance rate as a married man, with me on the policy, my health benefits are cheaper even with him added on, ect. We have always been super honest and open about finances and we are pretty independent with our finances except for big purchases, so it works out for us.
Post # 10
I ditto the good for you for getting this going now! It’s a tough subject to discuss but so essential for a healthy marriage.
Btw, most community colleges offer a course in personal finance–I wish it was required in high school. These courses can be so valuable.
Post # 11
I’ll echo the *good for you* sentiments! It’s not always easy, but we had the conversation before we combined households and it’s a lot easier to know what’s going on than to be in the dark. We discussed income, bills and debt (my student loans, his car loan and credit cards), our past spending habits, our goals and how we plan to handle money in the future. We both keep our own individual accounts and we also have a joint account that we use to save. We also agreed to discuss all major (anything over $100) purchases before spending, since we’re a team. Oh…and I gave up buying dresses and boots…not altogether…just not as often. 😉
Communication is the key here. He knows I’m more frugal than he is and he appreciates that and my ability to save and live debt free.
Have fun on your financial date!
Post # 12
@MissBoston: Absolutely about getting the emotional parts out of the way. FI was married before and is used to someone who spent ALL of the household money the second it was in the account and ran up outrageous credit card bills. He definitely had some baggage from that before we had our financial discussions.
I have been in debt before and can’t handle that drowning feeling, and I never want to be there again. Money stuff makes me panic. I’ve been credit card debt free for four years and I need to stay that way for my sanity. It makes me twitchy to know that he has $15k in CC debt, so I told him that as soon as we move in the spring and get settled, that debt is our number one priority so we can breathe easy and move forward without it.
Post # 13
Thanks, everyone – lots of good advice here! @MissBoston: I think what you said about talking about any fears we have with merging finances first, that way we can get all that out in the open and understand where the other person is coming from. Very good idea!
Post # 14
Happy to help! Just passing along what I’ve learned 🙂
Post # 15
I know it’s hard to discuss but it needs to be done. Make sure that you talk about incomes, debts, credit scores (you can get your credit score free once a year at http://www.annualcreditreport.com), budgeting, money habits, etc. Also talk about your long term goals like buying a house, saving for retirement, etc and how you will reach them.
Great job wanting to talk about all this before marriage!
Post # 16
First off, thanks again to all of you bees – everyone gave great advice, and it was really helpful to me!
We had “Finance Night” tonight, and we started off with “Where are we now” (current assets, debts, expenses, salaries), then moved on to talking about what we did or did not feel comfortable with in combining our finances (thank you, MissBoston!). We both felt that our pre-marriage money was our own, and we felt more comfortable keeping this separate. This led us to our plan of: keep our existing separate accounts (but move them to the same bank), set up a joint checking and savings account, and decide on a percentage or amount from each paycheck that will go into the joint account. This account will be used for bills, food, etc. The rest of the money from each person’s paycheck will go into our separate accounts, and will be the sole responsibility of that person. So, if FI wants to make a big purchase out of his own account, he can do it, though we did discuss some limits and decided to talk to each other before spending over a certain amount, even from our own accounts. I think this will work, but our plan is to reassess one year after the wedding and see how it’s going.
Thanks again for your tips, ladies!