Navigating Newlywed Life Through A Financial Lens
This last year has been challenging, and even more so if you’re a newlywed. Despite the obstacles, your finances don’t have to be one of them. Marriage is about having an open line of communication, even the overwhelming parts like finances. Here are some helpful tips so you can spend less time stressing over finances and more time celebrating life together.
The Do’s and Don’ts of a Joint Account
Marriage isn’t just about sharing a last name, bathroom, or your last bite of dessert. For some, it means sharing an account. Opening a joint bank account is a big step for many couples. Of course, the choice to get a joint bank account is dependent on every couple. A TD Ameritrade survey found 42% of couples living together keep a separate account. Whatever the case may be, there are pros and cons for newlyweds having a joint bank account.
The Good:
- Sharing is caring. Having a joint bank account allows money to be equal between a couple.
- It’s all in one place. Having access to all your money at once is convenient.
- Transparency. When money is all in one place there’s no room for financial surprises.
- Saving dollars. Joining bank accounts means having fewer fees in separate accounts.
The Bad:
- Fights over finances. Sharing money can be a cause for arguments among couples. There might be different perspectives when it comes to spending habits.
- Lack of independence. Not everyone spends money the same way, some couples might feel a lack of autonomy combining finances.
- Nothing is hidden. If a spouse is trying to get a surprise gift for the other, it will make it hard to cover their tracks.
Tackling Debt Together
When the ‘I Do’s’ are all said and done, the logistics come after. Consolidating each other's debt can be beneficial for newlyweds. Loans with varying interest rates paired with keeping track of other debts can be difficult. Combining debt into one loan often comes with a lower interest rate and a chance to group your debt into one place. A study done by Fidelity found that more than half of couples have debt when they get married — and it’s a source of conflict for four in 10 of these couples1. Tackling debt as a team is important.
How to tackle debt together:
- Open up. Have an honest conversation about it.
- Share your goals. Figure out how aggressively you want to pay off your debts.
- Make a plan. Start making monthly budgets and stick to them. Consider implementing the 50-30-20 budget (50% of income on necessities, no more than 30% on wants, and 20% towards debt repayment)2.
- Assign tasks. Divvying up responsibilities can help you work together. One person can pay the mortgage and the other can pay utilities.
Love, Life, Savings
Another step in the process of marital financial planning is preparing for the future. In the midst of opening up a joint account and paying off debt, it’s possible to save money too. A bucket list trip, purchasing a house, and growing your family, are all part of endless possibilities. To achieve all these exciting dreams, financial priorities must be set. First, figure out “why” you want to save money. Then consider opening up a checking and savings account. Budgeting correctly can help make these goals become a reality. It’s important to keep in mind to make more and spend less. Saving money can be difficult but always remember to remind each other why you are doing it in the first place.
Pinnacle Bank Makes It Easier For Married Couples To Save
Starting a life together can be exciting and overwhelming, which is why it helps to streamline your finances by creating a game plan as a couple. Pinnacle Bank can help you every step of the way, whether it’s opening a joint checking and savings account or finding the right mortgage on your very first home. Pinnacle Bank offers convenience to take care of it all with online banking and through the mobile app.
Sources:
1 https://www.lendingtree.com/debt-consolidation/debt-and-marriage/
2 https://www.nerdwallet.com/blog/finance/how-to-build-a-budget/