smart spending

6 tips for merging finances as newlyweds

Establish a joint account

It can be hard for new couples to merge finances immediately after getting married, but it's almost always good to establish a joint account, says Levy. She adds, "Separating finances may work fine in a short run because nothing needs to be worked out, but not when you look down the road."

Expenses that usually need to be covered by the joint account include houses, cars, child care, utilities, etc. It's important for a couple to outline the monthly budget for the joint account, Schmitz said.

It differs from couple to couple how to share responsibilities to contribute to the joint account. "There's no right or wrong. You have to figure out what's reasonable and what's not for you," says Levy.

Just take newlyweds Cameron and Cassie Doolady as an example. Cameron Doolady is a veteran and a student at the University of Iowa, while his new wife is a nurse. Although they have different levels of income, they put their money into a joint account.

"Having a shared account forces you to have communication and not to hide secrets," Cameron Doolady says. "So far, we haven't had any tension."

Discuss your finances

It's crucial for a couple to be honest and transparent with each other and communicate on a regular basis. Schmitz suggested that couples should discuss their financial status monthly.

"You would be surprised what can irritate your partner when you don't tell," Levy says. One of her clients didn't understand why his wife got so upset after she found out that he lent $1,000 to his friend. He thought it was OK because he'd loaned money to friends when he was single.

Investing is another key area for couples to discuss and decide on together, Levy says. "If an investment fails, your partner has to share the repercussions. It will affect your credit as a couple."

Set aside an emergency fund

Levy once worked with a couple who initially contributed equally to their joint account. Later, the wife injured her neck and lost her job, making it impossible to keep up the contributions to the joint account. While she wanted her husband to take over her responsibility, he insisted that she make up for the loss with her savings.

"With these tough economic times, young couples don't have a plan for losing a job, difficult health issues or other situations impacting their finances," said Schmitz. "Don't blame each other if things go wrong."

The couple later decided to put part of their savings into a new emergency account. Now if they run into problems later, they'll have money to use right away.

Merge your lifestyles

When two people get married, not only do they need to merge their finances, but also their lifestyles, according to Levy. For couples with income discrepancies, they may come across situations when one person wants to have a luxury meal or go on a vacation, and the other can't afford it.

In the Rogerses' case, despite the fact that they were critical about each other's spending habits at first, they learned to accept and compromise. They also cut back on their socializing expenses in general to support the other's hobby.

"You have to plan together," says Levy. "Otherwise, you are essentially living two different lifestyles under one roof."

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