Married and separate
Consider combining your finances.
You get married but keep your finances separate. Does this make financial sense? According to a 2013 article by Kansas State University researcher, Stephanie Jacques, arguments about money are a top predictor of divorce. So, does it make sense to combine finances after getting married? There seem to be strongly held arguments on both sides of this issue. Regardless of the side you choose, how one manages their finances is influenced by personal values. Michigan State University Extension believes that taking a money personality assessment may be helpful to understand how your values and emotions influence your money decisions.
When you communicate about money, using “I-Messages” may be a helpful tool. For example, when discussing paying bills with your spouse you may say, “I feel nervous when I notice that the phone bill is not paid because I worry about bad information on our credit report.” Additional steps for communication may help:
- Find the real problem
- Talk only about the problem itself
- Face the problem
- Brainstorm and talk about options
- Agree on a plan
- Support the plan
- And keep talking
If you decide to combine your finances, you may want to follow this plan adapted from the “Building MI Financial Future Financial Toolkit” compiled by the Michigan Department of Insurance and Financial Services:
- Request a free copy of your credit report online
- List all sources of income and expenses
- (If neither one of you have credit-related problems) Open a joint checking account to pay for household expenses.
- If one or both of you have credit-related problems, decide on a plan to attack this problem.
- Decide who is going to pay for what (consider your individual strengths and weaknesses)
- Discuss the relationship each of you has with money
- Consider opening a savings account for an “emergency or rainy day fund”
- Update your beneficiaries for IRAs, 401ks, annuities and life insurance policies, etc.
- Take care of your future self by contributing to your employer-sponsored retirement plan and/or IRA
Managing your personal finances takes time, patience and discipline. A successful marriage takes patience and discipline. Considering the role money arguments can have in divorce, it only makes sense to consider these issues. For more information or to access most of the tools alluded to in this article visit the MI Money Health website.