Things “back then” seemed much easier, especially when seen through the rearview mirror of culture.
Couples graduated high school, maybe college, then immediately got married, merging all their assets — which was approximately nothing.
Today, because couples are marrying later in life, they often have a complex web of mortgages, debt, kids and investments to combine. The median marriage age has risen to 28 for men and 26 for women, according to federal census data and the Pew Research Center. But no matter what your age or situation, navigating finances before tying the knot is essential.
“I tell my clients that if you can’t talk about finances when you’re in love, just wait to try and talk about it in a fight,” said Anthony Centore, founder of Thrive Atlanta Marriage Counseling.
Centore says couples are bringing more assets into their relationships, such as financial investments or businesses they own. And experts say couples 30 and older are typically favoring a joint account for shared expenses and individual checking accounts for discretionary spending.
“It does sort of create a delineation that, ‘We are sharing, but we each sort of brought something to this relationship,’ ” Centore said. But he says a couple’s contributions to a joint account are rarely 50-50, with the main breadwinner usually supplying more.
Felicia Speetjens, a senior vice president with Atlanta-based SunTrust Investment Services, says multiple accounts make more sense as the marriage age continues to rise. Changing how a person handles income can be very emotional, she’s observed, because financial habits are deeply rooted in examples set by one’s parents. And for many, Speetjens adds, money equals security, which can be closely linked to quality of life.
“It’s very hard for someone who’s been working for eight years to give up control over their money.”
In some cases, where one person is wealthy, or when people remarry in their 50s or 60s, couples might choose to keep income streams separate, she says. However you decide to marry your incomes, Speetjens urges patience.
“Managing money is a process that people learn over time. It’s not a process that happens once.”
Here’s an outline from Speetjens on how to start merging finances:
Current assets: Discuss all income streams and put together a comprehensive budget of ongoing expenses.
Logistics: For some couples, an equal division of household expenses might not be fair if one person makes significantly more. Also discuss practical issues, like who will write the checks each month.
Long-term goals: Discuss long-term plans. Decide when you want to retire, how many kids, if any, you want to have, and estate planning, if applicable. You can, alternatively, discuss your long-term wishes first, then use it to back into your monthly savings goals.
Revisions: Pay raises, children and caring for elderly parents are grounds for revising your plan. Other reasons include job loss, buying a home or an unexpected inheritance.
Did you encounter unexpected obstacles when combining your finances with a partner?
– By Lauren Davidson, Atlanta Bargain Hunter