- If you are a newlywed, sit down with your spouse and discuss the following 5 important questions about your finances.
- Separate credit profiles, joint bank accounts, tax filing status, retirement planning, and budget necessities are all great topics to discuss.
- There is no right or wrong answer because everyone’s situation is different. Answer these 5 questions based on you and your new partner’s needs.
- Don’t be afraid to talk about finances. Have open and honest discussions about money.
If you’ve just recently tied the knot and are wondering about your finances especially after receiving the credit card bill from your honeymoon, you’re in luck. Read on to discover 5 important questions that you and your new partner should ask concerning your personal finances.
Do We Still Have Our Own Credit Profiles?
Although the ancient phrase, “and the two shall become one” is related to the act of marriage, it has nothing to do with credit. You and your spouse’s credit profiles do not join into one. Even though both of your names may be on your mortgage or a car loan, you still have your own separate credit report.
Neither you nor your partner’s credit report will affect the other. If you’ve been negligent with your money and just had to purchase that Star Wars-themed bouncy house that you couldn’t afford, that decision will only affect your credit. Your partner’s credit score of 800 will not “rub off” on yours.
Should We Have a Joint Bank Account?
This completely depends on your philosophy of finances and how you and your spouse plan on attributed each other’s earned income. There really isn’t a wrong answer to this question. You’ll simply want to do what you’re both comfortable with.
Having both could be a really good compromise. You could have a joint account to pay for bills and other expenses that you share while also having separate accounts for leisure activities or items you want to save up for. Of course, shopping for each other’s birthday or Christmas presents could be mighty difficult with a joint bank account.
How Should We File Our Taxes?
Again, this comes down to preference and there isn’t a right or wrong answer. However, there is a better answer and that’s usually filing your taxes jointly. The only way that filing separately can be beneficial is if one partner earns significantly less than the other.
The way you file your taxes could also change from year to year depending on the circumstances. If one spouse had an unhealthy year that required high medical expenses, filing separately could help in regard to deductions. Other issues may occur during any given year that may change the benefits of how you file.
Do We Start Planning For Retirement Immediately?
As a general rule of thumb, it’s never too early to think or even talk about retirement. You and your spouse will want to be on the same page as your retirement funds start to grow. Being newlyweds, you’re more than likely in your 20s so it’s not a major concern at this juncture.
As you slowly adjust to operating your new lifestyle with two incomes, conversations regarding retirement should come up naturally. Don’t steer away from them but don’t stress over them either. Start putting a little away with each paycheck and reassess every quarter or two.
Is a Budget Necessary if We Are Already Responsible?
Budgets are never a bad idea unless you spend time making one only to ignore it. Then it’s just a waste of time. Either way, having a budget for the first year or so may help you and your spouse learn more about each other’s spending habits, but it’s certainly not required.
If you both are already responsible with how you spend and save your money, then a budget may not be necessary at all. If you are instinctively frugal with your finances then you can certainly go without a budget. If you like to spend while your spouse enjoys saving, then a conversation may be in order to get a budget in place.
Asking Questions is Never a Bad Idea
Although these questions don’t really offer specific answers, they are very important items to discuss. Your situation is going to be different from your neighbor across the street or your friends from college, but asking questions is never a bad strategy. Have open conversations with your spouse and don’t be afraid to make adjustments along the way.