Wedding season is reaching another peak as we begin to transition into the early fall. As two households combine, it is important to find the right balance between you and your partner’s finances. The Daily Deduction has a few tips to help make the transition smoother.
Communicate About Finances
The single most important factor in managing finances as a married couple comes down to how you and your partner communicate about finances; however, finances are often reported as one of the hardest things to discuss. Being open with your partner about finances can help you build a strong foundation for your marriage.
Decide Whether You Want To Combine Finances
Whether or not you choose to combine household finances after marriage, be sure to set clear savings and spending expectations. Let each other know how you are both doing financially. Set expectations for how you both communicate about finances (As a good rule of thumb, do not communicate about your finances as a couple when friends or family members are present.) Financial secrets from each other violate trust and are toxic to relationships. Vow to build trust by communicating with each other.
Recognize How Your Marriage Can Affect Your Taxes
Changing your individual filing status to a married-filing-jointly status can greatly impact your tax situation. Limits on some credits and deductions rise when filing jointly, which may allow you to qualify for credits and deductions that you as an individual were not previously entitled to. It’s best to discuss these tax changes with your tax professional.
Change Accounts One At A Time
Once you and your partner have decided whether or not you wish to combine finances or keep them separate, make any necessary changes to your account(s) over time (even couples that do not combine finances may want to add partners as authorized users to check the status of finances from time to time.) Making changes all at once can be overwhelming and it may even cause a communication break down. Plan your changes, discuss your plan as a couple, and discuss a timeframe for when you wish to have these changes in effect.
Prevent Nickel and Diming By Setting Spending Limits Ahead of Time
Make a spending plan and stick to it. Be sure that your spending plan has flexibility in it for miscellaneous spending. Then, negotiate how much each partner can spend from the miscellaneous spending category without telling the other.
Set Goals Together
Do you dream of traveling the world with your partner? Do you and your partner aspire to purchase a home, motor home, or boat someday? Whatever your dream may be, discuss your goals and how you plan to reach them. You are more likely to work together financially when have goals that you both wish to attain.