Once you walk down the aisle and say I do, a whole new world begins to unfold in front of you. Unfortunately, the world of conjoined partnership often comes with some dizzying financial discussions without many resources to set things straight. It comes as no surprise that money and finances are the number one issue couples fight about. According to a 2018 survey by Ramsey Solutions, fights about money are the second leading cause of divorce, beat only by infidelity. Since financial communication is a key indicator of healthy relationships, we at Lincoln Savings Bank want to give you and your spouse some helpful tricks and tools to stay on top of your joint financial future.
We understand money conversations aren’t always easy to have, so we’ve put together some questions to help you get started.
Should we keep separate checking and savings accounts?
Committing to spending your life with someone is a big decision, along with deciding if you want to keep your money separate or joint. When you have a joint account, there is no privacy. Your partner sees exactly where the money is being spent, and you may lose the feeling of having your own money. In an individual account, you have the freedom of managing your money. The downfall to individual accounts, however, is that you will have to discuss with your partner how you are going to divvy out the joint expenses, whether it is split 50-50 or based on your income.
There are also advantages to pooling your income into one account. You may incur lower fees for higher balances and you may earn more interest than you would on a lower balance account. The most important thing in deciding whether or not to have a joint checking account is being open with your partner and be able to designate a budget.
My significant other has debt- is it my responsibility to pay it back after we’re married?
This is a tricky question to answer. We will say that it’s very common for one or both people entering a marriage to carry some form of debt. While there are some benefits to teaming up to tackle the debt, the decision is entirely up to you. It would be best to discuss this with them before tying the knot, however.
What are your savings goals?
You may want to retire early, while your spouse has always dreamed of owning a vacation home. Discussing each of your long-term savings goals will help you get on the same page and develop a realistic plan. The same strategy can be used for short-term goals like a vacation or a new car.
The Key to Success
The key to having successful money management in a marriage is to remember to communicate. We’ve seen many successful financial households talk openly about their income, expenses, financial goals, and everything associated with money. (A willingness to trust and compromise also helps!)
Keep in mind, there is no one right answer. You may have to try different ways to manage your money until you find the one that works for both of you.
Many of our team members here at Lincoln Savings Bank have been married for 5, 10, or longer than 20 years. We would love to share our personal experiences and banking knowledge to help you and your spouse cultivate a financial future worth dreaming about. Whether you’re a newlywed, an approaching retiree, or both – we would love to help you and your loved one focus your financial efforts together. Stop by your nearest location or contact us online today to get started.
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