When you’re single, you’re going out on dates and meeting new people. When you finally meet that one person who changes your life for the better, you stop and think about the possibility of marriage. Often times, when we think of marriage, we only think about the fluff of marriage, and by fluff, I mean the honeymoon, the future “married life” date nights, and romantic getaways. Seldom do we think about the realities of marriage until we’re actually married.
One of those marriage realities is finances. During the dating process, you don’t really discuss finances with each other. You often save that conversation for when you know it’s serious, and even then, it can be an uncomfortable conversation to have with your significant other, but it is definitely a necessary conversation to have.
If you’re dating someone you know you will eventually marry, why not be proactive, and take the time to have a serious conversation about each other’s finances? Love, trust, and fidelity are huge factors in a marriage, but finances are just as big of a factor in marriage as well. Finances can, and have, actually been big contributors of the ending of marriages.
To prevent that chapter from happening in your love story, consider these financial factors that can impact your marriage.
As a married couple, you need to figure out whether or not you want to have a joint account, separate accounts, or both. Whichever one you decide, bringing finances into the relationship is definitely a conversation that needs to be discussed early on in your marriage, or even better, have it with your significant other while you’re still dating, once things get serious.
Having a joint and separate account is pretty common among married couples. A joint account can be very beneficial to your marriage. Each spouse would contribute a certain amount each pay period, and then make joint decisions on what to use it for. A joint account is typically used for family expenses; expenses that usually benefit the family as a whole. Some family expenses include the rent or mortgage, utility bills, groceries, and other miscellaneous bills.
Having separate accounts, as well as a joint account, also allows each spouse to have financial independence. Yes, once you get married, the majority of things are shared, but you are still an individual human being too.
Keeping separate accounts really isn’t such a bad thing. This allows secret, surprise gifts to remain a surprise, without your spouse being nosey, taking peeks into the account. This is also ideal in planning for special holidays and occasions.
If you only have separate accounts, with no joint account, it can come off to your spouse as being selfish, when you really don’t intend for it to come off that way. It can lead to arguments and disagreements in your marriage, so that’s why it’s important to have these conversations with your spouse as soon as possible.
Credit History and Credit Scores
Before you got married, and became one unit, you were an individual. You individually had your own life, money, and of course, your own debts. Many people get credit and marriage confused. They think that once you get married, your credit and your spouse’s credit get fused together to form one overall credit score, but that’s not the case.
Even in marriage you still have your own individual credit. The good thing is, if you marry someone who happens to have negative credit history, it won’t affect your individual credit history and score. The same applies for positive credit. Your credit score also won’t go up if your spouse has a positive credit history and score.
Any assets you want to purchase together, after marriage, will affect your credit score as a married unit. Your individual credit history and credit scores will have a direct effect on whether or not you will get approved for a particular product or service as a couple.
If you and your spouse are on the hunt for a loan or credit card, both of your credit scores will be checked individually. Let’s say you need a loan, and want to pursue it together, but your spouse has bad credit. There’s a high chance that you won’t get approved, or if you get approved, you’ll have very high interest rates, or you’ll have to shell out a nice chunk of change up front.
That whole process can be very frustrating, and influence you to just give up. Well, don’t give up yet. There are loan approval options for people with bad credit. If you did have a traumatic experience applying for a credit card, you’ll want to have a conversation with your spouse, discussing each other’s credit scores and history. In that conversation, you’ll want to discuss how, as a married couple, you want to handle purchases that require credit checks. The spouse with the better credit can pursue the loans that require positive credit, which will get you better interest rates.
You also have the option to pursue the loan jointly. This option does make you take on higher interest rates, if one or both credit scores are poor, but if the loan is paid back and in good standing, it also leads to the improvement of not only your credit score, but your spouse’s credit score too. This is a decision you and your spouse will need to make based on your financial situation.
Ever since your relationship got serious, you had to let go of your selfish ways, and be considerate of your significant other. Well, that selflessness definitely carries on into marriage, so much so that every decision you make, you have to consider your spouse.
When it comes to retirement, you have to consider your marriage’s future. When you retire, you’re considered to be living in your “golden years.” Well, you won’t be living in your golden years if you have no money saved up.
According to usa.gov, the most common ways people save for retirement is through their employer, social security, or by savings and investments. So whichever route, or routes, you and your spouse decide to take, be sure you talk about it together, and then consider seeking advice from a financial planner.