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How To Combine Finances After Marriage

A question most people have at some point in their lives is how do I combine finances after taking my marriage vows? This will take some planning. You and your new spouse should discuss this often. Then, together, create a budget that is attainable. Your planned budget has to include specifically how you intend to merge your finances. You can both begin by reading this guide in its entirety.

What Is Meant By the Phrase "Combining Finances After Marriage?"

When two people marry, most of the time they have separate bank accounts. Additionally, they have separate financial routines in the way they go about paying their creditors. After they marry, they usually decide to combine their bank accounts and any financial routines. The question that will be answered in this comprehensive guide is what is the best way for them to accomplish this?

What Is the First Step in the Quest for How to Combine Finances After Marriage?

The first thing the couple must do is decide if they want to maintain separate bank accounts or have a joint account. On the road to doing this, you may each want to speak to your representative at the bank. He or she could likely offer some viable options as well as recommend specific procedures.

This may sound petty, but it is necessary. You both have to agree on how you will list your names on the bank account. If you fail to do this, you might encounter difficulties in the future. Once you determine this, you are ready to proceed with the plans for your bank account.

Include a Budget in Your Plans for Combined Finances

A budget is particularly important at the beginning of your marriage. At this stage of your lives, neither of you are likely to be safe in your careers. Later on, once job and income stability arise, you might be able to eliminate the budget. For now, it is a good idea to have one.

When you are planning your financial budget, take into account whether you will combine your bank accounts or keep them separate. Remember to incorporate an emergency fund into your budget. This will come in handy should you incur any major home repairs or medical emergencies along the way. Each of these things mentioned in this section is an element of the finances you wish to combine.

Is There a Prenuptial Agreement in Place?

At first, this might seem unrelated. But in fact, it is quite relevant. A prenuptial agreement is a legally binding document drawn up prior to a marriage. It dictates what will happen to each person's money and assets if they ever get divorced. In a sense, it is protection for the respective partners in the event their marriage fails.

A prenuptial agreement should be part of the discussion between you and your mate on how to combine your finances. The details of these discussions should be spelled out in this agreement. As an example of couples who have done this, there are many celebrity couples where each partner had significant wealth prior to their union. In these instances, each of the two individuals wanted to protect that wealth from falling into the hands of the other, should they ever divorce.

So, What Does This Have to Do with How to Combine Finances After Marriage?

When you get right down to it, everything! When you set up your joint bank account and merge the rest of your financial assets, the prenuptial agreement has to be considered. The terms dictated by it will have an effect on how you proceed to combine your finances. Again, this is to protect both of you should your marriage go south.

In your prenuptial agreement, there should be instructions on how to move forward with combining your finances and assets right now. These instructions should be followed to the letter. Make your bank representative aware of this when you are still in the discussion stages of merging your finances.

Each of You are Advised to Have an Attorney Present

This is another element of our guide that, at the outset, does not seem relevant. The truth is, having an attorney involved is extremely relevant. He or she can instruct both of you on the best way to move forward with combining your finances. To avoid any conflicts of interest, each of the two people involved in the marriage should have their own lawyer.

After the attorneys are notified of whether a prenuptial agreement is in place, they will be ready to inform you of the most effective way to combine bank accounts and any other assets. It is highly recommended that you listen to your attorneys. Not doing so could lead to troubles down the road.

Do Not Forget the Financial Planner

When you are getting ready to merge your finances, not only should you consult an attorney, but a financial planner too. He or she will be professionally trained in this field. They can see to it that you do not neglect to include any pertinent details when you perform the necessary actions.

The role of a financial planner differs from that of a lawyer or a bank representative. This is a person who is licensed to make suggestions on how to combine finances after marriage. You and your spouse should take what he or she has to say very seriously.

Do Either or Both of You Have Your Own Business?

If the answer to this question is yes, you must plan for this when you combine your finances. Will the business owner want their spouse to be involved in the business? Does this business have a separate bank account from your personal account? Most often, the answer to that question is yes.

Answers to the above-posed questions will be instrumental in determining how you two go about combining your finances. For the best results, these things should be hashed out before you actually get married. If you do have a prenuptial agreement, the answers to those questions ought to be fully laid out in it.

Do Either of You Already Have Children?

Yet another point that does not seem related until you think about it. Yet, it is very important. Whether one or both of you already has children will factor into how you set up your joint finances. Will each of you be responsible for your own kids? Or, will you share in the care and comfort of all of them?

You will need to answer these questions in your joint discussion of how you merge your finances. What about college savings funds for the children? This is another key financial question that has to be accounted for. Your family conferences on such issues need to begin before you marry. Then, ultimately, you will make your financial combination arrangements with these answers in mind.

Please note: if you do not already have children, but are planning to begin a family of your own, your answers to these questions will be different. Then your pertinent answers need to be considered when you combine your finances after your marriage vows have been taken.

What about Existing Financial Investments?

In this section, we are talking about things like stocks, bonds, crypto currency, real estate property, etc. You get the picture now. Do either of you already have investments in such assets? If yes, will you be merging these too?

When neither of you already has these investments, do you plan on starting to invest in any of them in the future? If yes, will these be combined or individual investments? See, the answers to these questions certainly DO matter. When you are combining your finances, they must be part of your financial picture.

Do Not Ignore the Credit Cards!

When you are in the process of determining how to merge your finances, do not forget about the credit cards. Do each of you have your own credit cards? How many? Are they all paid off or do you have mounds of debt? Will you get rid of any and start a new joint credit card?

The answers to each of these questions have to be accounted for when you merge your finances. Bear in mind, not only do you have to consider the current state of your credit cards, but also what will happen when you have children. This is part of the financial picture you will be painting for yourselves.

Prepare for Your Senior Years Together

What does this mean? With a little hard work and perseverance, your marriage should last into your senior years. When you make your plans to combine your finances, you have to prepare for this. Do not neglect to do this or you will have a rude awakening when you get older.

Whatever elements of your assets and investments you intend to join together, provisions should be made for when you each reach retirement age. Your financial planner is qualified to help you in this endeavor.

Please Put Everything in Writing

Your parents probably have been instilling this into your brain since you were a youngster. Any important information regarding your life needs to be written down in complete detail and kept in a safe place. This includes all the facts about your pending financial merger with your spouse. Your respective lawyers should have copies of this document as well.

All elements of your decisions on how to combine finances after marriage absolutely must be put into a legally-binding document. Your attorneys can assist you in making sure it complies with all local laws as well. If you fail to take this step, you could be in for a difficult time if the marriage does eventually end in divorce.

Be Prepared to Make Compromises

According to industry experts at Money, a couple who is entering into marital bliss must be prepared to compromise a lot. The compromises will include the area of how to combine finances after marriage. Each of you is probably already set in your own financial ways. That will change after you marry.

Part of this picture will be determining where your priorities lie. Not only does this matter to the marriage in general, but also in planning to combine your finances. If you both have different priorities regarding your finances, it will be critical to compromise before you take any actions.

Honest Discussions about How to Combine Your Finances are Crucial

Many people avoid discussing their finances with others, viewing the topic as far too personal. Yet, if the other person is your intended spouse, it is crucial to have these discussions often. If you do not do so, your marriage will be starting out on the wrong foot.

Both of you must be brutally honest in your talks about money and how to join your finances together. This has to be taken care of as soon as possible after the ceremony. Especially if you want to begin a family right away. If you and your beloved mate cannot come to an agreement right now, perhaps you are better off not marrying at all.

The Two of You Can Do This

You and your new spouse must love each other or you would not be getting married in the first place. Therefore, you do not want to allow the subject of combining your finances to ruin things for you. With proper planning, documentation, and solid legal representation, the joining together of your finances can be done. Have a long, healthy, and prosperous marriage.

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Allen Lee

Written by Allen Lee

Allen Lee is a Toronto-based freelance writer who studied business in school but has since turned to other pursuits. He spends more time than is perhaps wise with his eyes fixed on a screen either reading history books, keeping up with international news, or playing the latest releases on the Steam platform, which serve as the subject matter for much of his writing output. Currently, Lee is practicing the smidgen of Chinese that he picked up while visiting the Chinese mainland in hopes of someday being able to read certain historical texts in their original language.

Read more posts by Allen Lee

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