I am a newlywed. Which clearly means I am full of unsolicited advice for other couples! Kidding—but truth be told, during my engagement, I found that some of the best advice came from couples who were also in the throes of the engagement process. There are just some experiences that are best spoken about with peers.
One such experience that I had with my wife, then-fiancee, was the realization that an engagement is not only a time for planning a wedding, but also a time for planning the particulars of your life together. One of the most daunting and important of those particulars is joint financial planning.
This article is a compilation of some of our experiences with joining finances, in order to share those moments that made us think a little differently. Whether you’re getting married or moving in together, there comes a time when you and your significant other will link your financial lives, and just maybe our experience—and unsolicited advice—can help you with that step.
Beginning the Discussion
While we were engaged, my wife and I attended a marriage preparation retreat. During one session, the couples were invited to suggest talking points for the group. By far, the question that grabbed everyone’s attention and was discussed the longest was “How are you planning to merge your finances?”
We quickly learned that at least half of the couples had not even embarked on this discussion. Even though, at the time, we had begun this conversation, we had only talked in abstract, big-picture terms, and it was comforting to feel like we were not terribly far behind. Other couples had been living together for years, and largely seemed to keep their finances separate. But there was one couple we could totally relate to. They were trying to join their finances in a manner that would make them feel like they were truly planning their life together, while still maintaining some of the independence they were used to.
My wife, in her infinite wisdom, responded to their concerns offering an idea of hers we had only just begun to play with. We had briefly discussed opening a joint checking account to manage the majority of our expenses, and another for savings (the importance of which cannot be overstated). Then, we would keep our original personal checking accounts open and transfer at least a nominal amount into them automatically each month. We felt that this would help intertwine our financial lives, while still giving us a little extra to spend (without guilt) on something fun the other might not understand or to help keep gifts for each other a surprise.
Each couple is different and, therefore, has a different way to solve financial issues. The things to keep in mind, though, are what’s important to the two of you, and what your goals are. We ultimately decided we wanted a joint financial life, but still a bit of flexibility and independence to ease the transition from single to married. Once the priorities were set, building on that conversation was much easier.
Twice the Fun
For me, the most significant financial change that has come with married life is a change that does not actually exist. It is a figment of my imagination that I encounter at the end of a night out with my wife. It makes my heart pound a bit and causes me to reconsider that evening’s choices.
About a month and a half after we were married, my youngest brother turned twenty-one. We met up with him and some friends for our first real social outing as a married couple. We had a casual dinner, a few drinks apiece, and of course purchased a few rounds for my now-of-age baby brother. In total, the evening cost around $150.
Up until just before our wedding, I was in school—college, then law school—and was used to living on a strict, student-debt-incurring budget. My comfort zone was spending anywhere from $15 to $40 on a casual night with friends. Though I knew this was not a normal night (how often does your brother turn 21?), I still did a double take when I saw the evening’s bill, and vowed not to go out again for the rest of the month.
It took me a long time to remember that with our joint income came joint bills—we weren’t splitting nights out anymore, but we weren’t each paying $150 either. So while it appeared the evening bill had doubled, realistically nothing had changed. Whenever the time comes for you to join your financial life with your significant other’s, just remember that, yes, your expenses may have increased, but so has your income. And of course, living together provides a whole new set of ways to cut back on existing bills. So take a deep breath, hand over that credit card, and rack up those miles! It is all going to be ok.
Trial and Error
If my wife and I could go back to those months before we got married, and redo any part of it, we would definitely spend more time analyzing and planning our future expenses. We had budgeted for rent, food, and the big expenses, discussed how we would plan for retirement, travel, and home ownership, but we failed to consider that our spending habits would change in a variety of ways. In short, we weren’t fully aware of what our “together budget” would look like. We assumed we’d take our individual budgets, squish them together and have a married budget to live by.
We now realize that the transition would have been more comfortable if we had more closely analyzed our single-life spending for a few months prior, and our together spending for a few months after the switch. Looking at your single-life budget allows you to understand what is important to you as an individual, highlight the expenses that will likely change, and identify areas where you can potentially trim. You can then make a projected budget, and track the first few months together to see how closely you can stick to it and identify areas where your budget strays.
The key here is remembering to analyze after the first few months of living together. Some things, like rent and utilities, were spot-on. It took us a few months to realize that other areas were very different than we had expected. For many couples, living together creates instant savings in the grocery bill—you no longer have to buy two of everything, and isn’t it so much easier to shop for two than for one? However, our experience was a little different. We end up spending more on food now, because we eat a family meal together every night, whereas when we lived apart, many nights we individually scavenged in the kitchen or ate canned soup instead of always buying fresh produce.
Our social lives changed too. We partake in more social events, small adventures together, and meals out than we used to. Part of this is because I’m no longer in school, and part of it is because we just have different priorities now that we are married. Some couples will spend less on going out than they used to, others will spend more on rent because they want a nice place to have friends over for dinner parties. You’ll likely save on utility bills, maybe taxes too. But the important thing to realize is this: you’re going to spend your money differently together than you did as individuals, and you must take stock of this and adjust your budget accordingly.
A new budget will require some trial and error, and will continue to change as new life circumstances come up. We know that this will be a cycle of adjusting, coasting, and adjusting again (especially when we reach that terrifying time of possibly becoming parents)! But we are enjoying the experience and not just discussing daily cash flow—we are planning where we want to be in our future and working to achieve those goals together. And above anything else, the number-one thing to remember in joining your finances is that you are joining them. You’re in this together now, and it doesn’t have to be scary.
Francis Tucker is a practicing attorney in New York City. He enjoys traveling, experimenting in the kitchen, and a good Scotch