I am getting married soon and my fiance and I need to come up with a plan for our money. I own a house and he pays me rent. What else should we merge? — Molly
I love that you already own a house, are willing to share it with your love, and have set a clear plan by asking him for rent before you get legally married.
Unfortunately, money can become a sore area in a relationship. According to Gallup, “Almost nine in 10 Americans who are thriving in their financial well-being agree that their relationship with their spouse, partner or closest friend is stronger than ever. But this drops to six in 10 among those who are suffering in financial well-being.”
I want you and your love to THRIVE in your relationship!
So, let’s come up with a plan, shall we?
Moving forward, here are some suggestions I have seen work over the years as a Certified Dave Ramsey Financial Coach:
Create a joint checking account.
I believe for a couple to become a strong team (especially if you are planning to have children someday and one parent chooses to stay home with the kids) combining expenses and responsibility helps with financial sustainability.
You can open a new joint checking account together, or just add the other person to an existing account (with the help of your bank representative). Of course, you’ll want to pick a financial institution that has low fees and great service!
Calculate all of your fixed expenses and determine how much each person should contribute to them.
This will require a fair discussion and may change as your fixed expenses change. The first step in figuring this out is to start filling out a Monthly Cash Flow Plan and give yourselves PLENTY of time, love, and compassion for the process.
Money can be a trigger for people! If it starts to get tense, one (or both of you) may be having growing pains around managing money. Very normal!
Don’t be afraid to take a time out and do a little reflective work on what is the trigger. Keep the communication channel between you open and accepting–no shame or judgement please! And don’t forget to have little private celebrations for each baby step you finish.
Determine how much you would like to set aside for savings and investments.
It is so much fun to GROW YOUR MONEY!
Before you can do that, however, you need to put some money aside for “sinking funds.” These are the safety nets in your plan.
Your first order of business should be figuring out how to quickly accrue a $1000 Emergency Fund. If you are disciplined, this can double as an emergency overdraft buffer to help you save on those expensive “oops” bank fees. Otherwise, stick it in a savings account or shoebox in the closet.
The next is calculated savings for occasional items and extras like furniture, cars, home maintenance, or a vacation. I suggest this be a weekly amount and be transferred to a separate savings or investment account automatically. Once the money accrues in the account, you can jointly agree on how to invest it.
Again, this work can be hard! Don’t expect to nail it on your first try. Give yourself a good year or so after the marriage to fine tune the numbers–and the habits to go with it.
You should also ideally have separate medical, retirement, investment, and saving accounts.
Determine how much joint money you would like to keep in your account for variable expenses that may come up.
This one will differ for all couples.
There will be holidays, birthdays, and special events to which you might both want to contribute. You might have repairs from normal wear-and-tear issues. You might also want to give some money towards a charitable opportunity.
This number will be hard to nail down right away, so just make a best guess and try it.
Create an allowance and separate account for “fun money” spending.
You both work hard for your money and should be able to spend it any way you wish. I found that it works best if each person has their own weekly “purse” which is not controlled by the other.
I hope this helps!
YOUR TURN: I would love to hear how other couples manage their money. Share your stories in the comments below!
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