Combining finances after marriage

You’ve just gotten married; congratulations! Now that the wedding has passed, consider joint finances with your spouse, like joining bank accounts and merging credit cards. It's not as exciting as sampling wedding cake, but in the long run, it is much more important.

The benefits of merging finances. 

Now that you’ve taken some time to get settled in as a newly married couple, it’s time to take a closer look at what marriage means for you and your spouse when it comes to finances. Don’t be afraid to inform your partner of your salary, your investments, your debts, and your credit score. It will be easier to make shared financial decisions when you’re both aware of each other’s details. 

 Here are some quick yet important pieces of wisdom you can consider to help make your new life together stronger and more financially secure as time goes on. 

Combine your bank accounts and credit cards. 

• Budgeting is easier and more organized when your money is in one place. A joint savings account also helps you work toward taking your next vacation or purchasing a new home. Visit a bank together and speak to a specialist about account options. Opening two joint accounts could help. You can manage your monthly expenses with one, while saving to invest with another. 
  
  
•  Joint credit cards are part of the same conversation. If you use a credit card that has an annual fee, having multiple cards from a shared account can reduce the fees you pay. Keep in mind that you'll be spending for two, so be cautious about running the balance up.  
  
  
• If there’s a chance you'll be forced to carry a balance at some point, apply for a card with a low APR (annual percentage rate). Moving forward, team up to avoid the habit of paying only the monthly minimum on your bill—which may mean you end up paying more on every purchase you make over time. 
  
  
• Building credit is important when it comes to taking out loans or signing up for services. Responsible credit card use is a good way to build your credit score. Get into a routine of using your credit cards consistently and never missing payments. 
  
  
•  When you're ready to make an offer on a home or purchase a car, you and your spouse will want to be in a better financial place. Most banks offer a credit score feature, so take advantage of it. Learn your credit score, and then work on improving it.

Combining debt.

Debt is a word that can bring a cold sweat and sensations of anxiety to countless people. Many of us have it in the form of student loans, credit card balances, car payments, or one silly mistake we made years ago. 

 As a married couple, you might have double paychecks (and double debt), but in any scenario, you're a partnership, and you should team up on handling debt. Sit down and be strategic about approaching what you owe—how much and to whom. Next, devise a plan that best helps you start crossing debts off your IOU list.

 The two most common systems of debt paydown:  

• The Avalanche Method
  The avalanche method consists of paying down multiple debts in order of interest rate (from highest to lowest), which helps you save the most money in the long run. 
  
  
• The Snowball Method 
  With the snowball method, debts are paid in order of balance size, starting with the smallest. The snowball method may be the best option if you and your spouse have had a hard time paying down debt in the past. Seeing an immediate impact when you pay off small balances can encourage you to continue your battle against debt.

Agree on investments and a retirement plan.

Investing is an important point of discussion for newlyweds, and it should continue throughout marriage. Retirement may seem to be a lifetime away, but it's not that far off in reality, so start your marriage on the right foot and begin preparing.  

• A common assumption is that retirement funds are for individuals, not couples. However, there are a variety of retirement paths you can pursue together. Start by figuring out if either of your employers’ match retirement contributions. This is free money and should be taken advantage of.  
  
  
• Next, research investment categories you can explore. Speaking to a financial professional might be the best place to start if you want to be guided through the world of IRAs, 401(k)s, equities, fixed-income investments, real estate, and other investments.¹
  
  
• Don't assume that you need a lot of equity to start investing. There are always options to start small, now. Make it your mission to learn a little about investing each day. Before you know it, you and your spouse will have your shared money working for you. 

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¹Investments are offered through properly licensed Registered Representatives of NYLIFE Securities LLC (member FINRA/SIPC), a Licensed Insurance Agency and a New York Life Company.