How separate (or
intertwined) should your financial lives be?
Provided by Benjamin Bogetto
Some
spouses share everything with each other – including the smallest details of
their personal finances. Other spouses decide to keep some individual financial
decisions and details to themselves, and their relationship is just fine.
Just
as a marriage requires understanding, respect, and compromise, so does the financial
life of a married couple. If you are marrying soon or have just married, you
may be surprised (and encouraged) by the way your individual finances may and
may not need to change.
If you are like most single people, you have two
or three bank accounts. Besides your savings account
and your checking account, you may also have a “dream account” where you park
your travel money or your future down payment on a home. You can retain all
three after you marry, of course – but when it comes to your expenses, you have
a fundamental decision to make.
After you marry, the two of you may also find it
best to have three checking accounts. Yours,
mine, and ours? Essentially. A joint account can be set up specifically for
household expenses, with each spouse retaining an individual checking account.
Of course, each spouse might also maintain an individual savings account.
Do
you want to have a joint bank account? The optimal move is to create it as soon
as you marry. Some newlyweds find they need a joint bank account only after
some financial trial-and-error; they would have been better off starting out
married life with one.
If you only have individual checking accounts,
that forces some decisions. Who pays what bill? Should one
of you pay most of the bills? If you have a shared dream (like buying a home),
how will you each save for it? How will you finance or pay for major purchases?
It
is certainly possible to answer these money questions without going out and
creating a joint account. Some marrying couples never create one – they already
have a bunch of accounts, so why add another? There can be a downside, though,
to not wedding your finances together in some fashion.
Privacy is good, but secrecy can be an issue. Over time, that is what plagues some married couples. Even when one
spouse’s savings or investments are individually held, effects from that
individual’s finances may spill into the whole of the household finances. A
spouse who has poor borrowing or spending habits, an addiction, a sudden major
debt issue, or an entirely secret bank account may be positioning himself or
herself for a money argument. The financial impact of these matters may affect
both spouses, not just one.
A
recent Ameriprise Financial survey of 1,500 couples found that nearly a third
of them argued about money matters at least once per month. About 70% of the
respondents in that survey reported making purchases without informing their
spouse or partner. Seventy-three percent said that they made money decisions
differently than their better half did. In households like these, a little
communication could help put both spouses or partners on the same page.1
So above all, talk. Talk to each other about how you want to handle the bills and other
recurring expenses. Discuss how you want to save for a dream. Chat about the
way you want to invest and the amount of risk and debt you think you can
tolerate. Combine your finances to the degree you see fit, while keeping the
lines of communication ever open.
This material was prepared by MarketingPro, Inc., and does not
necessarily represent the views of the presenting party, nor their affiliates. This
information has been derived from sources believed to be accurate. Please note
- investing involves risk, and past performance is no guarantee of future
results. The publisher is not engaged in rendering legal, accounting or other
professional services. If assistance is needed, the reader is advised to engage
the services of a competent professional. This information should not be
construed as investment, tax or legal advice and may not be relied on for the
purpose of avoiding any Federal tax penalty. This is neither a solicitation nor
recommendation to purchase or sell any investment or insurance product or
service, and should not be relied upon as such. All indices are unmanaged and
are not illustrative of any particular investment.
Securities offered through First Heartland Capital, Inc. Member FINRA/SIPC
Bogetto Financial is not affiliated with First Heartland Capital, Inc.
Bogetto & Associates does not provide legal or tax advice. These topics are discussed in conjunction with your CPA, Tax Advisor and Attorney.
Citations.
1 - bloomberg.com/news/features/2016-09-29/couples-can-spy-on-each-other-s-spending-with-this-new-bank-account
[9/29/16]
Financial Health...For Now & Tomorrow
Contact us Today
Website - www.bogettoandassociates.com
Telephone - 314-858-1602
Email - peter@bogettoandassociates.com
10805 Sunset Office Drive, Ste. 202
St Louis, MO 63127
Website - www.bogettoandassociates.com
Telephone - 314-858-1602
Email - peter@bogettoandassociates.com
10805 Sunset Office Drive, Ste. 202
St Louis, MO 63127
