Your ceremony went without a hitch, guests got down at the reception and you and your honey just enjoyed the vacation of the lifetime. You may feel like you can now breathe a big sigh of relief and settle right into marital bliss but there is still one outstanding task that remains to be tackled -- the marrying of your financial accounts. If not handled appropriately, this could bring your euphoric honeymoon period to a screeching halt. In fact, for many couples, the financial disagreements are the ones that cause the greatest tension in their union.
Thankfully, an easy-to-follow checklist has been assembled to help you keep this seemingly monumental task relatively simple.
1. Bank Accounts
You've probably already given some thought as to what you'll do with your savings, checking and other personal banking accounts once you're married. But have you sat down to talk it through with your spouse? You may find that you're on a different wave length or haven't considered all of the options, which include:
• Joint - one (or both) of you close your existing accounts to consolidate your funds into a single account where you both have account ownership
• Separate - you decide to keep your finances separate; this is definitely an option but requires a bit of work to determine how you will cover bills and other expenses as a couple
• Something in-between - many couples now have several accounts; a joint account to handle budgeted expenses and separate "fun" accounts to handle non-essentials like eating out with friends, gifts and clothing
Even if you decide to keep your personal finances separate, it's smart to shop around to find the right institution for your funds. Take some time to research who is offering the best rates and services to meet your new married lifestyle. Remember to take fees into consideration as well.
2. Collision of Credit
These days, it seems that credit is what makes the world go round. And, with how you handle your current credit accounts being a big determining factor in what loans and rates you will qualify for in the future, it's important that you not only get a firm handle on your accounts but also the ones bearing your spouse's name.
A good way to kick off your credit account review is for each of you to pull a copy of your credit report. Americans receive one free credit report from each of the three major credit bureaus (Experian, Equifax and TransUnion) every 12 months, so this is a quick and cheap way to get an accurate picture of all of your credit accounts for you to review.
Here are some credit related accounts to review together as a couple:
• Current credit cards - just like your banking accounts, you have several options when it comes to your credit cards. You can add your spouse as an authorized user, become joint accountholders or keep your credit cards separate. If you determine that there is too much temptation and potential debt accrual among all of your credit cards, be smart with which cards you decide to close. The length of your credit history has a impact on your credit scores, so you'll likely want to steer clear of closing the oldest cards in your wallet.
• Potential credit cards - while you're at it, this is a great time to review your new needs as a couple and consider whether different credit cards would make more sense for your family. Between the cash back and low interest cards available to consumers, there are many cards that are designed to work for your wallet. If you're overwhelmed by the options, take a quick trip to a credit card comparison website; they're developed to help you narrow down the options and see how different cards stack up against each other.
• Other loans - remember to take the time to review your other loans, too. These may include auto, real estate and signature loans (including bill consolidation and student). This will help you determine what your financial obligations are as a couple and when some additional money may be freed up in your monthly budget in the future.
3. Other Accounts and Factors
There's more to your finances than just your banking and credit accounts. You'll also want to review the following accounts and financial factors to ensure that you're setting up your marriage for fiscal success:
• Life insurance - this is a difficult subject to breech. The last thing any of us want to face is the loss of our spouse. But this is the time that you'll want to review the benefits you receive through the workplace and determine if additional life insurance is necessary. It's also the time to review your beneficiaries and make any necessary updates.
• Retirement - whether you have a retirement plan through your work, participate in a 401k or similar program, or have separate accounts earmarked for your golden years, you will want to take the time to review your retirement options. You may want to visit with a financial planner to get professional insight.
• Tax withholding - if you plan on filing your taxes jointly, you'll want to review your current withholdings to determine if they need to be increased, decreased or stay the same.
If you're reading this before you've taken the plunge at the altar, it's recommended that you set aside some time to talk to your sweetie about your financial personalities and habits. Taking the time for this conversation can save you from a lot of financial and emotional heartache down the road.
CreditDonkey.com has published an easy-to-read infographic providing eye-opening information regarding fiscal infidelity in marriage, as well as an accompanying blog article that provides questions to help guide your conversation with your partner. It might not be the most fun gab session you've ever had but you'll be glad that you did it in the long run.