Discuss these money factors before combining finances
Many couples may decide to combine finances and open joint credit card accounts at some point in their lives. However, there are several factors that couples should discuss to make sure they are on the same page about their money management goals. Having a candid talk about money can help couples avoid financial disputes in the future and develop a set of goals together.
One of the first actions many couples take to get more in-tune with each other's financial standing is to swap credit reports, according to U.S. News and World Report. A consumer's credit history provides details about credit card and loan accounts, outstanding balances, payment histories and public records information. Couples that are developing a debt management strategy will benefit from knowing how much combined debt they will be responsible for paying. This can help them make more informed decisions when setting up a budget and reorganizing their income.
Creating a budget is the next important step, having a detailed money management plan will make it easier for couples to cover their joint costs. In addition, it will allow them to set aside money for savings, retirement goals and discretionary purchases. Making your budget together also allows individuals to discuss their own spending priorities and habits, and develop a set of spending boundaries that can keep them both happy.
Consumers should also discuss whether they want to open joint bank accounts. Having a joint account can make it easier to pay bills and work together to accomplish goals. However, a joint account may not be necessary for combining finances and some individuals may want to have some financial independence.
For couples who don't combine accounts, it's important to decide on a bill payment plan and who is responsible for which costs to keep financial obligations from falling through the cracks. For example, one partner may decide to cover food and utility costs, while the other pays the rent or mortgage. In addition, couples also have the option of transferring money into each other's accounts to cover certain bills.
Lastly, couples may also consider opening a joint credit card account. Before taking this action, it's important that each person understand that they will be held equally responsible for credit card debt accrued. For this reason, couples may benefit from setting spending limits and paying close attention to their balances and billing deadlines to safeguard their credit.