One thing is for certain, marriage is full of challenges – and perhaps nothing is more challenging to a marriage than finances. After the wedding day, couples need to know that the journey of a thousand miles and decades into the future together – financially speaking – is going to be drastically different than if you were to “do it alone”. Here are some major considerations couples should know and plan for when it comes to finances after marriage.
Bank Accounts – Joint or Individual?
One of the first things married couples need to consider is what to do with their bank accounts. Should you have joint bank accounts, separate bank accounts, or a combination of the two? Having a joint bank account with your spouse means you both can withdraw and deposit in the account without the consent or knowledge of the other. An advantage of having a joint bank account is that you may be able to present a stronger case for a loan application or credit card, because you’re combining you and your spouses’ financial resources. On the other hand, many couples decide to keep their bank accounts separate and setup paying expenses accordingly. Bottom line – couples should carefully consider what kinds of joint or individual accounts works best for them through setting clear and realistic financial goals.
Establishing the “Couple’s Budget”
While it might sound easy – establishing a budget as a “couple” is entirely different than creating one as an individual. When we are single, most of us understand the concept of “my money”, “my budget”, “my stuff”, “my debt”, etc. As a couple, “my” becomes “our” – and this is an important mindset to understand after you are married. Why you ask? One of the top reasons why couples get divorced is related to MONEY. Establishing a budget together early in the marriage will help you succeed in the long term. For example, this includes a plan for paying down school debt (not his debt or her debt – but “our debt”), a plan for monthly expenses, and a plan for savings. Establish your budget together and plan to discuss it on a monthly basis to ensure you are both are on the same page.
Credit Scores – Remain Separate – But both are Considered for Jointly-Owned Assets
Your credit scores remains separate after you’ve tied the knot—there is no such thing as a “marital” credit score. While you can’t merge your scores, these scores can still affect your financial risk as perceived by lenders—i.e. if you were fiscally irresponsible before you were married, your credit history can negatively impact you as a couple. For example, if you are planning on purchasing a house or a car together, each of your credit scores will be considered when you purchase one of these jointly-owned assets. This also pertains if you apply for joint credit cards or personal loans. In order to avoid both credit scores from being considered, an option would be to purchase the car in one name only, which would result in only one credit report being pulled. If both incomes need to be included— which is typically the case for most car loans or home mortgage loans— then both credit scores will be taken into consideration. As a couple, discussing each other’s financial history is extremely important to do before walking down the aisle. This will allow you to better plan for the future, and to resolve any issues before you tie the knot.
Preparing for Retirement
As a couple, it’s important to make sure you are financially set for the long haul. This means you need to start saving for retirement now. If you work for a company that offers a 401k plan, put in the maximum contribution amount that will be matched, or at least contribute as much as you can afford. If you have a Roth IRA, put in the maximum amount every year if at all possible. But even if you can’t max out these accounts, even putting in $50 a month will help you in the long run. If you or your significant other does not have access to one of these retirement funds due to job occupation, place a certain amount of money each month into a savings account instead-this allows you to earn interest on your investment. Because of compounding interest, time is just as important as money when it comes to growing your retirement fund, so don’t delay and start saving as soon as you can to maximize your return.
Setting Financial Goals
After marriage, too many couples forget to set financial goals and to continually update those goals as time progresses. To get started, couples should consider setting aside emergency funds (three to six months of essential bills), and then focus on setting 1-5 year goals, such as a down payment on a trip. Long-term goals, such as saving for your child’s education or your retirement, should be considered as well. When planning long-term saving goals, keep in mind that you cannot withdrawal money from retirement accounts earlier than your plan permits without a penalty. To avoid penalty fees, consider opening a long-term savings account in addition to a retirement savings account.
When it comes to finances after marriage, the best advice is to keep open and honest lines of communication. Most importantly, both spouses should look at how their financial decisions impact the marriage – not just their individual considerations.
If you and your significant other need financial assistance with a wedding, honeymoon, a mortgage, or more, call or visit your local Mariner Finance branch today to speak with one of knowledgeable representatives about the different loans and financial services we offer. We will work with you to find the best loan option for your budget and needs!
†We offer personal loans from $1,000 to $25,000, with loans terms from 12 to 60 months. Minimum and maximum amounts dependent on an applicant’s state of residence and the underwriting of the loan. Loans between $1,500 and $15,000 may be funded online. Loans greater than $15,000 or less than $1,500 are funded through our branch network. Specific interest rates and fees are determined as permitted under applicable state law and depend upon loan amount, term, and the applicant’s ability to meet our credit criteria, including, but not limited to, credit history, income, debt payment obligations, and other factors such as availability of collateral. Not all rates and loan amounts are available in all states. Additional fees may apply to some loan offers; some state required and/or permitted fees may be treated as prepaid finance charges. Any such charges shall be in addition to the loan amount requested and/or approved and shall be fully disclosed to the applicant on his/her loan agreement. Not all applicants will qualify for the lowest rates or larger loan amounts, which may require a first lien on a motor vehicle not more than ten years old titled in the applicant’s name with valid insurance. Our loan by phone and online closing process requires a compatible mobile or computer device on which you can access your email and electronic documents. Not all loan types are eligible for loan by phone or online loan closing.
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. As a result, under our customer identification program, we must ask for your name, street address, mailing address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents.
For any stated annual percentage rate (“APR”), the APR represents the cost of credit as a yearly rate and will be determined based upon an applicant’s credit at the time of application, subject to state law limits. A range of APR’s may be applicable, subject to state law limits and individual underwriting. Not all applicants will qualify for a lower rate. APR’s are generally higher on loans not secured by a vehicle, and the lowest rates typically apply to the most creditworthy borrowers. All terms and conditions of a loan offer, including the APR, will be disclosed during the application process. As an example, with an amount financed of $5,000.00 the borrower receives $5,000.00 at an APR of 29.99% and an interest rate of 28.77% which includes a finance charge of $3,640.96. Under these terms, the borrower would make 48 monthly payments of $180.02, for a total of payments of $8,640.96. The amount financed may not be the net proceeds paid if charges other than interest are included in the loan.
*The process uses a “soft” credit inquiry to determine whether a loan offer is available, which does not impact your credit score. If you continue with the application process online and accept a loan offer, or are referred to a branch and continue your application there, we will pull your credit report and credit score again using a “hard” credit inquiry. This “hard” credit inquiry may impact your credit score.