Before we got engaged, I came into the relationship with increasing debt from my one credit card, a car loan, phone bill, and student loans - all accounts that needed paid monthly. I also had been using my PA-based bank, exclusively. On top of all that, I was really financially private and (honestly) very ashamed of my constant indulgences and money-smithing I was doing to get everything paid. No questions were allowed to be asked, and I took great offense to any budget discussions (sorry ben!).
When we got engaged, the idea of being a jointly operated unit was pretty daunting. We were already living and financially operating together - paying the rent with two separate checks, alternating who got what utility, whoever went grocery shopping paid the bill, etc. And I kept thinking what a pain it would be to transfer my automatic bill payments (see: monthly payments, above). I had asked other recently married folks but they all seemed to already have a joint account, years before getting hitched. Surprisingly, they also seemed to have a greater difference of pay (Ben and I get paid very similarly). This further confused what we should do and how to handle it.
We settled on a slow transition and complete honestly. I had to also change, monthly, how my direct deposit from work was being divided up between my old acct, new acct, and joint acct.
Step 1 - set up new accounts (individual and joint).
Step 2 - stop using old bank account
We both agreed I was nuts for having a bank account that had the nearest ATM 2300 miles away. Step 1 - stop using old bank account and take inventory of what was linked to it (Groupon, Car, Phone Bill, Roth IRA, paypal, credit cards, amazon, etc). I then grouped them into easiest to update bank information (Groupon) to hardest (Car Loan). I had transitioned everything except my car loan and my credit cards by the time the wedding came around. The idea was that I was going to finish out my car loan (paid off December 2012!) and just use the money in the acct to pay off my credit cards, so they didn't affect my "spending money" in my new acct. Dumb idea, and it really just slowed down the pay-off process.
Step 3 - agree to what comes out of the joint acct.
We decided that Rent/Mortgage, Utilities, Groceries, and out-to-eat adventures. It sometimes includes Dog Boarding, vacation excursions, and other "together" events. But getting to this point was hard to do when I still had money in my old account. It wasn't until I moved everything and closed the acct that I had enough "cushion" in my new personal account, could I share the joint spending burden. The joint acct is viewable from both our individual accounts - so there's no sneaky spending or hiding. For more information, because we get paid very similarly, we both put in equal amounts of our paycheck into our joint account to pay these joint purchases. I think if our pay had a greater difference we would do a proportional pay into our joint acct (and savings).
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Final Thoughts
- Be open about financial worries with your spouse. My dad said it the best when I asked for his advice: "when you get married, your debt and his debt is now both of your problems" - we're a team and needed to be able to ask for help. Your financial habits will affect your family.
- Don't judge. the past is done and the money is spent. The best way to go about it is to be understanding and help each other make better decisions.
Anything you want to discuss?
What are some of your financial stumbling blocks?
more from the money series
TOP photo from our engagement photos, taken by an amazing photographer friend - check out his stories and pictures here
BOTTOM photo from our wedding, via Cardens Photography in PA
