Summer is here and that means wedding season is upon us. If you're planning a wedding, the budding flowers and warm air only adds to the excitement of counting down to your big day. But in the midst of your wedding stupor, have you sat down and figured out how you're going to manage your finances after the wedding? Here's how to make sure that your wedded bliss doesn't come to a halt when it's time to pay the bills.
Talking about money is no easy task. In the whirlwind of deciding on cake flavors and invitation designs, this discussion sometimes falls through the cracks. You assume that things will be fine, but everyone has a different approach to managing (or maybe not managing) their personal finances. Do you know if your significant other owes a massive amount of credit card debt? Is one of you good at saving while the other person is better at spending? This isn't something you want to find out after the wedding or years down the road.
Time to Chat
Before you decide how you're going to manage your newlywed finances, sit down and discuss your current financial situation.
- What debts do you currently owe?
- How much do you pay in rent/ on a mortgage each month?
- What's your monthly salary?
- What things do you like to spend your extra money on?
- Is your credit report clean?
Each of you should fill out a personal monthly budget worksheet. Remember that you're going to be saving for two people now, so you might need to cut back on a few expenses to stash a little more aside each month.
Compare your sheets and figure out where you can eliminate or combine expenses. Once you've talked about each of your financial obligations, it's time to figure out how you're going to save your money and pay your bills as a couple.
Pooling All Of Your Money
Since you share food and utilities, it only seems fair that you both pay for household expenses. If you combine financial obligations, you won't have to worry about who paid what bill. Another perk is that you won't have to play bill collector and constantly ask your spouse for money to cover their half of the bills.
If you have a joint account, both you and your spouse should log into your Lake Trust Online Banking account and the Lake Trust Mobile App to check balances. Go over payment amounts and dates together so you both know when things are coming out of your account. Use the budgeting tool within Online Banking to make a budget together, get a spending snapshot and view upcoming bills.
The downfall of this method is adjusting to each other's spending habits. If one party isn't good at managing money, it can be frustrating for the other person to constantly monitor the account. Remember that you're a team and you're working together to achieve your goals.
Personal And Joint Accounts
With this option you both keep separate accounts but you also have a joint account for household expenses. Use your joint account to pay your mortgage or rent, utilities, groceries and insurance, but use your personal account for splurges.
With this method, you don't have to feel bad buying an expensive lunch with your coworkers because the funds will come out of your allowance and not your joint savings or bills account.
Choose a certain percentage or a set amount to come out of your paycheck to fund your personal account.
Keeping Your Own Accounts
Keeping your money completely separate isn't a bad idea, as long as you can both cover your part of the bills. You can divide your bills 50/50 to make things even, but then that puts the responsibility on one of you to ask for money when things are due. To make it easier, use Online Banking to transfer money between your account and your spouse's. If you have trouble saving money for large expenses, open a Special Savings account. Use this separate savings to stash away a little bit each paycheck so your larger costs don't take you by surprise.
Another way to make this method work is to have each person take responsibility for certain bills. For example, you could take care of groceries and cable and your spouse could pay for utilities and the rent. With this option, you don't have to worry about asking the other person for money.
Start your marriage off on the right foot and figure out your finances before you tie the knot. You have many years of happiness ahead!