How to Handle Your Finances After Marriage

If you have recently become engaged or married, one of the first things that you should do with your fiancé or spouse is to sit down and discuss how you will manage your finances in the future. Combining both of your finances will involve compromise, planning, and joint decisions on future financial goals. Just remember, it is better to fully disclosure your financial picture to your fiancé or spouse; hiding problems or debt could have a significant negative impact on your marriage.

It is important that you make any significant financial decisions jointly as a couple to avoid creating financial frustration and aggravation in your marriage. The first thing you should do with your spouse is to establish a joint budget. To do this you will need to be completely honest with your spouse about your income, debts, assets, and credit history. The easiest way to create a joint budget is to itemize your monthly income and all your debts. This information should include all your monthly bills from your rent or mortgage, auto loans, student loans, installment loans, and credit card balances. Both of your individual financial plans have just become one joint plan, so it is important to know exactly what both you and your spouse spend your money on. Whether you decide to share in the bill paying responsibilities or to entrust one spouse, both parties should be aware and able to find out what the household income is being spent on. When creating your new joint budget, you will find that there are many areas that you will be able to save money. Most households can save quite a bit of money by combining insurance, utilities, consolidating debts, and eating at home more often. Your joint budget will help you cut down on your monthly expenses and allow you to save money. Once you've decided on your new budget, it would be in your best interest to put aside any savings that you have towards an emergency fund for future unforeseen events or possibly save the excess money towards the down payment on a house. You could also use any excess funds in your joint budget to pay down debt. The best place to start would be high interest credit cards, installment loans, or student loans. Paying off debt will improve your overall financial picture in the future.

Most financial advisors state married couples should have enough savings in an emergency fund to cover three and six months of expenses. Also, all the assets that each of you have should be discussed, these include: checking accounts, savings accounts, 401(k)s, stocks or bonds, or other valuable assets. It is important to discuss not only your current financial situation, but also your personal goals with your spouse, such as: homeownership, eliminating debt, vacations, and even retirement.

It would also be in your best interest to pull and review your credit reports at least annually for both you and your spouse. The three main credit reporting agencies have set up a website where you can obtain a free copy of your credit report annually. This website is: annualcreditreport.com. If you have intentions of purchasing a house in the future, it would be beneficial to you to review your credit report and scores to see if there are any inaccuracies or derogatory credit that you will need to address prior to applying for a mortgage.

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