Introduction
Marriage is an important commitment that requires both partners to share their lives with each other. It’s also essential that couples learn to manage their finances together. Unfortunately, money is also a common source of stress and tension in many marriages. Splitting finances between married couples can be complicated and overwhelming, but it doesn’t have to be. This article will provide a comprehensive guide to help couples navigate this issue.
Establishing a Joint Bank Account
One of the first steps couples should take when splitting finances is to open a joint bank account. According to a survey conducted by Ally Bank, “72% of couples who opened a joint bank account reported feeling more financially secure as a result.” A joint bank account can be beneficial for several reasons. First, it allows couples to combine their income into one account and easily track their spending. Second, it simplifies bill payment and encourages couples to save for shared goals. Finally, it gives both partners equal access to the account and helps build trust.
When deciding on an account type, couples should consider their financial priorities. If they want to earn interest on their savings, they should look for a high-yield savings account. If they want to maximize rewards, they should look for a checking account with a cash-back program. Additionally, couples should make sure to shop around and compare fees and features before making a decision.
When setting up a joint bank account, couples should also consider how much money each partner will contribute. They should discuss their individual incomes and expenses and decide how much each person will put into the account. It’s important to remember that both partners need to be comfortable with the arrangement. As Diane J. Goodman, licensed professional counselor and author of Money Advice for Your Successful Remarriage, states, “Couples should agree on the amount of money each will contribute to the marriage and then adjust as needed over time.”
Creating a Budget
Creating a budget is another important step when it comes to splitting finances between married couples. A budget can help couples understand where their money is going and plan for their future. According to a survey conducted by Credit Karma, “60% of couples who create a budget together feel more financially secure.”
When creating a budget, couples should start by listing their income and expenses. They should decide which expenses are necessary and which ones can be cut back on. They should also set aside money for savings and plan for unexpected expenses. It’s important to remember that a budget should work for both partners so they should make sure to factor in each person’s needs and wants.
Utilizing Separate Accounts
Although couples should establish a joint bank account, they may also benefit from having separate accounts. According to personal finance expert and author of Money Love, Bari Tessler Linden, “Separate accounts can be a great way for couples to maintain some autonomy in their relationship while still being connected financially.” Separate accounts can be beneficial for several reasons. First, they allow couples to have their own money for discretionary spending. Second, they can help couples keep track of their individual expenses. Finally, they can help couples maintain a sense of financial independence.
When deciding whether or not to open separate accounts, couples should consider their individual incomes, expenses, and goals. They should also discuss how much money each partner will contribute to the joint account. Once they’ve made a decision, they should make sure to update their budget accordingly.
Designating Responsibilities
When splitting finances between married couples, it’s important to designate responsibilities. Couples should discuss their expectations and establish rules for managing their money. For example, they should decide who will handle the bills, pay the taxes, and manage the investments. It’s also important to discuss how each partner will handle their individual expenses.
According to certified financial planner and author of Smart Women Finish Rich, David Bach, “It’s important to make sure that each partner feels comfortable with their role in the relationship.” He also states, “The key is to find a balance that works for both partners.” By discussing their expectations and establishing rules, couples can ensure that each partner is comfortable with their role.
Planning for Unexpected Expenses
Unexpected expenses can quickly derail a budget. To prevent this, couples should plan for them in advance. One way to do this is by creating an emergency fund. An emergency fund is a savings account that is specifically designated for unexpected expenses, such as medical bills or car repairs. According to an article published by Forbes, “Having an emergency fund can help couples prepare for unexpected expenses and reduce financial stress.”
Once couples have established an emergency fund, they should decide who will pay for unexpected expenses. Generally, the spouse who earns the most money should be responsible for paying these expenses. However, couples should discuss their individual incomes and decide what works best for their situation.
Setting Financial Goals Together
Another important step when it comes to splitting finances between married couples is setting financial goals. Setting financial goals can help couples stay motivated and organized. According to certified financial planner, Eleanor Blayney, “Setting financial goals is a great way for couples to focus on their long-term financial security.” She also states, “It’s important to set realistic goals that both partners can agree on.”
When setting financial goals, couples should start by discussing their individual priorities. They should also decide how much money they want to save and how long they want to save for. Additionally, they should create a plan to achieve their goals. This plan should include specific steps, such as automating deposits, tracking expenses, and reviewing their progress.
Seeking Professional Guidance
If couples are having difficulty splitting finances, they may benefit from seeking professional guidance. Working with a financial advisor can help couples understand their options and make sound decisions. According to certified financial planner, Bruce Helmer, “A financial advisor can help couples create a plan for their financial future and provide guidance on how to manage their money.”
Couples can find a financial advisor through word-of-mouth, online search engines, or financial planning organizations. It’s important to make sure to choose an advisor who is experienced and trustworthy. Additionally, couples should make sure to ask questions and read reviews before selecting an advisor.
Conclusion
Splitting finances between married couples can be a daunting task. However, by following the tips outlined in this article, couples can make the process easier. They should establish a joint bank account, create a budget, utilize separate accounts, designate responsibilities, plan for unexpected expenses, set financial goals, and seek professional guidance. By taking the time to properly manage their finances, couples can ensure that their marriage is built on a strong foundation.
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