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Married finances: a guide
Published 26 September 2012 by Helen Gradwell
Sitting down and discussing your finances before you get married could help you avoid misunderstandings – and maybe arguments – further down the road. Sharing your life with someone involves a lot of change, so we hope our guide to married finances can help!
There's a lot to think about when you're getting married. First and foremost, there's the wedding itself to be arranged. Then perhaps a honeymoon. You'll also be dreaming about your future life together. Where will you live? Will you have children - and if so, how many?
So it's no wonder that making financial arrangements for your life together can fall by the wayside when you're about to get married. It's an important issue, however. As many married couples will tell you, money can cause arguments. That's why it'll really help to get all of your finances in order before you get married. It could save you a lot of stress later on.
So here's our guide to getting your finances in order before you get married. It could also be helpful if you're already married - but you haven't got round to arranging your married finances just yet.
Talk about your debts
This can be a very daunting prospect for both partners. Huge numbers of us have been in debt at some point in the past - and managed to repay it in a timely manner. Many of us are still in debt today, and coping with the repayments perfectly well. It may not be necessary to discuss it in any great detail.
But if you're having problems repaying a debt, you've been made bankrupt in the past, or you regularly need to borrow just to make ends meet - these may be issues you feel you need to discuss with your partner.
Having a clearer picture of each other's finances can make it much simpler to plan ahead. If you've both got debts that you're struggling to repay, you might be able to tackle them better if you do it together.
If you end up joining your finances together, remember that any joint debts incurred will have to be repaid by both of you. You could end up responsible for those debts if your partner became unable to make payments.
Talk about your financial goals
What do you both want from life? Do you want an expensive house or car? Where do you want to travel? How many children - if any - do you want? Where do you want to go with your career?
Telling your partner about your goals and dreams can help you both work out how much money you'll need to make these dreams a reality, and set out a timeframe. For example, you might decide you want to be a homeowner, or higher up the career ladder, by the time you're 40.
Discussing your goals should also help you see whether there are any areas where you disagree. Do you want to live in different locations, for example? It's best to know about these potential problems earlier rather than later - so you can try to come up with a compromise.
Work out a budget
Figure out how much you and your partner earn each month. Then take into account everything you have to pay for - like your mortgage or rent, bills and food. Everything that's left over is available to spend, although putting some into a savings account is always a good idea.
Agree on how much you should both spend each month, and how much you'll want to save for the future. It can be very difficult to keep your family finances afloat if one partner is consistently spending more than the other - or spending money you need for other purposes. If you know from the beginning how much disposable income you'll have between you, you'll know where you stand financially.
Do you want a joint account?
Joint accounts can be very useful, especially for joint costs. Your mortgage or rent payments, bills, food costs, insurance, etc. will probably need to be funded by both of you. Decide how much you each need to pay into your joint account each month. If one of you earns more than the other, for example, it might make sense for them to pay in more.
Some couples like to have a joint account for the things they need to pay for together - but keep separate personal accounts for spending. Then there is a clear line of what is 'their' money and what is yours.
Others prefer to go 'all in' and share all of the household income. In this case you should refer to the above advice in the 'budget' section. You'll need to draw up clear boundaries about what each partner is allowed to spend per month. This obviously doesn't have to be set in stone - for example, one of you may agree to spend less one month so the other can make a big purchase.
If you are thinking of getting a joint account, you could take a look at the thinkmoney joint Managed Current Account. With its dedicated team of Money Managers and built-in budgeting system for all the joint essential bills you may have, it could be an ideal partner to your married finances.
Do you need insurance?
Getting married is a big commitment, but so is everything that comes after. For example, taking out a mortgage may be one of the biggest financial commitments you'll make in your lifetime. You may also want to have children, which takes a lot of emotional commitment (as well as financial).
So how can you protect everything that's important to you - like your home, your family, the possessions you've worked hard for? One of the surest ways is to get insurance. It can be difficult to know what the future holds, but it can really help to know you and your family are protected. You could start by finding out more about life insurance, critical illness insurance, home insurance and income protection.