One major aspect of marriage preparation people often ignore is finances. The irony is that finances are one of the most crucial and potentially volatile topics in the marriage relationship. Although I can’t speak to finances through the longevity of marriage, there are several things Mason and I have learned that are important to understand in the pre-marital process.
When the honeymoon week comes to a close and you’re jerked back to reality, you may realize that there’s a lot to do! But wait…before you can do ANYTHING, you have to make sure that your marriage license has been filed. Until that is done, you can’t get your new Social Security card. Until you get your Social Security card, you can’t get your driver’s license. And until you get your driver’s license, you can’t change your bank account information. Once all your legal paperwork is taken care of, it’s time to change and consolidate! Oh, and don’t forget, ladies, your name must be changed on ALL the accounts I will discuss. Set aside time to do this properly.
Joint Versus Separate Bank Accounts
One decision you need to make as a couple is whether you want to have a joint bank account, separate bank accounts, or both. There are pros and cons to each decision. Mason and I decided to join our bank accounts for a couple reasons. Most importantly, becoming one in marriage also means becoming one financially. It is logistically easier to be unified financially if everything is going into and coming out of one account. Also, it gives us both equal access to our financial information.
Right now, both Mason and I still have our previous checking accounts open with a small amount of money in each, in addition to our joint account. But that’s not our long-term plan. My checking is still open to make sure I didn’t have any other checks or automatic payments coming in and out that I wasn’t aware of. Mason’s is still open because he liked being connected to a local bank that we may use again one day if we move back to his hometown. We may end up closing both of those soon, but at least it goes to show that consolidating finances is not as simple as it sounds. There are a great amount of reasons a couple may choose to retain separate accounts for a time. Every couple is different and this process takes time, but I highly recommend having a joint bank account and, more importantly, being open about finances with your spouse.
A similar decision must be made about credit cards. You can either keep separate cards and accounts or have one account and both spouses as authorized users. Eventually Mason and I hope to move towards the latter, but we both had Discover cards with Cash Back Match that we only receive after finishing the first year on our accounts. We highly recommend a Discover card if you don’t already have one. Discover is especially great for those just starting out who don’t have established credit. Click here to register for a card. Also, I was offered an excellent Cash Back Card through our bank that Mason was not since he is still a student. Taking credit card opportunities like that can be wise, but different depending on each spouse’s financial history and stage of life.
All of these are reasons why credit cards are not as simple to consolidate. Sometimes it makes more sense to remain separate for a while to reap the Cash Back and point rewards that come from paying your bill IN FULL every month. I have to include the disclaimer that I do not recommend using a credit card at all unless you can (and will) pay the full amount each month. Otherwise, it is not worth the money you are losing in interest on your payments.
Remember that thing your parents always told you to do with your money? Yes, saving is important, ESPECIALLY in marriage. However, this looks different for everyone. It is likely that a newlywed couple will be fighting to survive financially, much less to save anything. But it is possible! Sit down with your spouse and set a monthly budget.
A resource we have found extremely helpful is Mint. You can sign up online and get the app for free and it is an easy way to keep track of all your accounts. This software spits out reports and helps you know if you are on track with spending. Once you set a realistic budget, you can set a savings goal. Even if it’s small, it’s good to get in the habit of putting money back. I have found tons of great saving tips and written about them in my post, 5 Saving Techniques For The Savvy Student. You can even practice with saving for a special trip or activity. The habits you build at the beginning of marriage will remain with you, so make them financially savvy ones.
A level up from savings is the important art of investing. If you have saved a relatively good chunk of money that you won’t need for a few years (we all wish we had that problem, right?) a really great thing to do with it is invest. Talk to a local or national wealth manager about what that might look like for you. Your money can easily accumulate more money when used this way. Even if this isn’t possible for you right now, tuck this advice into your back pocket for later down the road. It could make a world of difference to your financial situation later in life.
If you are not yet married, I highly recommend discussing your financial situation, assets, and debt BEFORE you get married. Mason and I had countless conversations and went through pre-marital counseling that addressed it as well. That helped us tremendously in planning our future and financial outlook.
If you are married and are still trying to figure out how all your finances are supposed to work together, I hope you find this post helpful. I have a long way to go before I understand everything, but I also know that the transition stage is a crucial learning time.
Managing finances in marriage is something we will all likely deal with in our lifetime. Keeping a kingdom-first perspective in your giving, saving, and spending is most important! After all, it’s all God’s money anyways. We are just the stewards.