Hey everyone! Today, we’ve got a guest post for you today from Jacob. Since we’re celebrating our six-year wedding anniversary, it’s the perfect time to talk about how finances can change after marriage. Jacob runs his own personal finance blog called Dollar Diligence. Aside from his teaching career, he likes to learn & write about managing money and going on road trips to new locations. Follow him on Twitter @DollarDiligence!
When I married my wonderful wife, I knew that our finances would be different, but I did not know how different. Prior to getting married, I had made some wild changes to make sure that I could pay off my student loan debt because I did NOT want to be in debt for the rest of my life and wanted to live a debt-free life with my wife.
Fortunately, my wife did not have a lot of debt when we got married. We did discuss the topic and we were on the same page. Yes, it was a bit of an awkward conversation, but I think it is something that all couples should do because finances do change. In fact, when couples generate debt together, each person can be held responsible for the other’s debt, so it is crucial to understand what could happen.
You’re One, Not Two
While you may think, wow, we are now one because we have been joined in unity, it does not always translate to cheaper. For example, you may find that you pay more in insurance premiums because you are now a couple instead of individuals. Should your spouse have a more challenging record than you, you may have to spend more per month to insure the both of you. If you both have clean records, you may receive a discount and you can benefit from joining together on the same insurance plan.
One of the ways finances change when you get married is through your credit score. This one is a bit tricky because some people understand it and others do not. Your credit report is yours and yours only. The ONLY time that your credit score is affected by your spouse is when you open up a joint account.
So, for instance, if the two of you rent an apartment together, but you move out and the other party remains and is later on evicted, it goes on both of your records. The same goes for a joint credit card. If your spouse charges up the card and never pays, your credit will suffer too.
Before you share any type of account or credit card, you need to make sure that you and your spouse set boundaries and that you fully trust them to make the right decisions. Should you not, do not sign up for joint accounts because the two of you will be responsible.
Approval for Loan Refinancing
One of the biggest ways our finances changed when we got married was that my wife was approved for student loan refinancing. She always wanted to refinance her student loans because they had a hefty interest rate and the monthly payments were pretty high.
On her own, she did not qualify because the lender was leery about her income and it was right on the border of what they would accept. Once we were married, the lender used both of our incomes to determine whether or not my wife could be approved and they approved her application with me as the cosigner. This move will help her save tons of money in interest over the long-run. The student loan refinance guide from studentloans.net helped us find a lender and decide if it was right for us.
Uh-oh. Now that you are married, what happens with the bank accounts? You have a few options actually and you do not have to panic. Yes, there are some changes that may be made, but only if you want them to. First, the two of you can keep separate accounts. Second, you can have a joint account together. Or lastly, you can have one joint account for say bills and then keep your separate accounts for your own personal spending, etc.
Myself and my wife opted to share both a checking and savings account and we have never run into any trouble with it. We have set boundaries for ourselves and we always consult with each other before any large purchases are made with the money that is in there. We find this to work the best for us, but everyone is different.
Whatever you choose, you need to be comfortable with it. If you are not comfortable sharing an account, then don’t. If you want to ease into it, then open an account together and slowly use it to build up trust in one another. You do not want to feel vulnerable when you share an account, so it must be a decision that is made between the two of you.
Don’t Let Finances Control You
Don’t let your finances control you and take the reins. You need to control your own finances and once you are married, the two of you need to work together to figure out how to handle your finances. Myself and my wife have a joint account and we put out income into the account and pay all of the bills from it. Prior to getting married, we split up the bills evenly and paid them from our own accounts. Remember, do what works best for you.