What a wonderful day, despite the impatience and in-law worries,
your wedding went off without a hitch and the honeymoon time was
incredible. You and your newly wed spouse are back in your shared
home, the gifts are opened and put away, bills are looming and it’s
back to work tomorrow.
So what do you do to merge two single finances into one married
package?
Arguing with a spouse about money is one of the top three things to
worry Americans the most when it comes to personal finances, so says
a survey by NFO Research. Another survey brings out that nearly 70%
of all recently divorced couples blame arguments starting over money
as the largest single contributing factor to their divorce.
With a statistic like that hanging over their head, it is no wonder
many newlyweds are nervous to talk about finances. Merging their
individual finances into a single unit is critical for long-term
success of their marriage. What are newlywed, or nearly wed, couples
to do?
1. Know where you are going. As soon as you set a date to start your
life together, begin sharing intimate details about each others
financial life. If you find both of you hate financial planning you
can decide who will do what now. It will not be any easier now than
it would after your marriage, but there is less pressure to “just do
it” and get it over with.
2. Share the news with the Government. Visit the Social Security
website at http://www.ssa.gov for information on replacing your old Social
Security card if you are changing your name. Also don’t forget the
Department of Motor Vehicles to change your driver’s license. If you
have other dealings with state or federal agencies, you will want to
change their information about you as soon as possible to avoid any
problems later.
3. Hang onto your marriage certificate. Before you put this little
piece of paper away somewhere you “won’t forget it”, keep it handy
the first year to show as proof of your nuptials. Financial
representatives can not accept a picture of you cutting cake at the
reception, and some airline frequent flier miles programs won’t
update your information unless you have a legal document as proof.
4. Consolidate to save money and arguments. The two of you are
married now, act like it financially. You do not need separate
checking accounts for separate paychecks to pay for merged bills. By
having one checking account you may save on bank fees. To overcome
the risk of checks not being recorded, use checks with the duplicate
feature and put both of you on a cash allowance. This will help
prevent over-use of the check book and arguments about where the
money went.
5. Make a financial date night. Choose a night early in the month
after all the bills have arrived and spend some time paying the bills
together. One writes out the check, the other records the payment and
stuffs the envelope. Use this time to discuss finances, goals and
clear the air about concerns you may have. These date nights may lead
to deep discussions about personal goals, household responsibilities,
or even career plans, so listening is critical.
6. Re-evaluate your insurance coverage. Changing your marital status
may lower your auto insurance premiums. Employer provided health
plans may be consolidated under a family plan, or is it more
advantages to maintain individual plans? Do some looking around and
get quotes on your health and auto insurance needs from multiple
sources.
7. Other insurance considerations. Now that you have a family, do
you need more life insurance? Nobody likes to think about it, but
disability income and life insurance policies can greatly reduce
worry and stress on a family in the event an accident or premature
death occurs. The advantage to buying life insurance while you are
young is the lower cost. Buying 20-year level term insurance can be a
more inexpensive method of buying protection during the time your
children are still living at home.
8. Will you, or will you not? If you die without a will, the passing
of your assets to your heirs is determined by a judge who determines
how much of your assets go to your children, your wife, your father,
your uncle, and every other relative who thinks they have a claim to
your estate. A quick trip to a lawyer for a small fee, or an hour
with a good computer program should put your mind at ease that your
family will be taken care of the way you want. Planning on estate
division can raise difficult issues, but this is a vitally important
thing to do for your loved ones.
9. Promises, promises. You promised love at your marriage ceremony,
no make some further promises. Promise to consult each other before
making major purchases, setting a price as to determine when
discussion needs to occur before the purchase. It doesn’t matter if
the sports car you have always dreamed about is being sold right now,
if you cannot talk to your spouse about it, don’t buy it.
10. Respect each other. It is normal for you to not always agree
with your spouse about money. This doesn’t mean someone has to be
wrong and have their resistance worn down. Listen to their opinion
and respect their right to have it. You never know, their idea may be
better for your family.
Roger Sorensen
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