Miscellaneous

Personal Finance Tips For Newlyweds

By Brett McKay

When a couple gets married, they’re not only joining lives, they’re joining bank accounts. Each person brings to the relationship different attitudes and ideas about money. One of the key’s to a happy and successful marriage is to get on the same page with your spouse about finances.

Here are 5 things that a couple thinking about getting married should consider before getting hitched.

1. Review your credit history and debt together

Before you get married, sit down and look over each others’ credit report. One person’s bad credit score, is bad for the couple. You don’t want to find out when you apply for a loan that your lovely husband racked up thousands of dollars in credit card debt to pay for a video game habit while in college. By then it’s too late. Finding out each others’ credit score before you apply for a loan can help you decide whether to leave the person with the crappy score off the loan application so you can get a good rate. If you don’t do this, you’ll end up like this guy:

The guy is kind of a douchebag when he says he wouldn’t have married his wife if he knew her credit report. But the commercial gets across the point that it’s important to know each others credit report before getting married. It will help you make decisions when taking out a loan.

2. Discuss financial goals

Find out each others’ financial goals and attitudes about money. Is your wife a spendthrift or a frugal monger? Does your husband want save for a down payment on a house or does he want to be a renter? You can preempt money tension down the road by getting your goals and attitudes out in the open from the very beginning of your marriage. If one of you likes to spend and the other likes to save, your marriage isn’t doomed, you’ll just have to come to a compromise. Make this compromise at the beginning of your marriage.

3. Decide whether to have joint or separate accounts

The choice to have joint or separate accounts is entirely up to your personal preference. Each has their benefits and drawbacks. It also doesn’t have to be either/or. Many couples have a joint account for home expenses and maintain separate accounts for personal ones.

If you do decide to open up a joint account, make sure you both are aware of how much is in the account. You don’t want to have pay unnecessary overdraft charges.

4. Draft a budget together

Budgets aren’t sexy. It’s tedious and boring. Creating a budget with someone else makes it even harder because each of you have different priorities on spending money. While you might want to allocate more money for entertainment, she might want more money for personal care products.

But creating a budget together is vital. It will help bring your spending habits more in-line with each other. It also makes BOTH of your aware of what’s going on in your finances instead of just one person being in the know.

What do you all think? Any other tips that you’d give newlweds? Drop a line in the comment box and add to the conversation!

Image by Allele

Full post as published by The Frugal Law Student on January 15, 2008 (boomark / email).