As the month of love, February is a great reminder of how special love can be, no matter the form it takes in life. One of the most exciting forms for love is marriage, which is exciting but can also bring with it some challenges.
Joining lives with someone typically requires some changes, especially when it comes to merging and managing finances. Financial decisions can directly impact your future together, so creating a thoughtful plan and communicating well about finances is key. In honor of the month of love, we’re sharing some tips for how to successfully merge your finances and insurance after marriage.
Discuss Goals
Sharing goals is the first step in planning a solid financial future. Start with a list of goals, both short-term and long-term. After establishing a list of goals, decide which items are most important to both of you. When you’ve set priorities on goals, then you can focus on accomplishing them.
Prepare a Budget
Next, set a reasonable budget together. Start by identifying required expenses and then give yourself an amount for unplanned expenses. If your expenses are exceeding your income, determine where you can cut back. Decide how you want to approach managing your finances. If both people want to be involved, be sure to use a system that works for both parties.
Decide on Accounts
You’ll have to decide whether to combine bank accounts or keep them separate. Weigh the pros and cons of each and consider what will work best. A joint account is beneficial in easily keeping records and lower maintenance fees. Separate accounts may be more beneficial in keeping track of how much money is in the account at all times, as just one person is withdrawing.
Consider Your Debt
If you’re considering adding your name to your spouse’s credit accounts, think thoroughly. Joint credit means both parties are responsible for the debt and it can negatively impact the credit rating if one person has poor credit. Additionally, make sure to consider any debt, either from student loans or elsewhere, when planning your joint budget.
Combine Insurance
You and your spouse likely already have your own insurance coming into the marriage, whether it be auto, life, etc. You’ll want to examine both policies and decide if it will be more beneficial for you to keep separate policies or get on the same plan. Bundling multiple cars with one insurance provider may make you eligible for discounts and can make managing policies easier.
As you work through this new chapter in life, consider visiting with a financial adviser to help you along the way. If you’re an OKFB member, your member benefits provide you with multiple insurance and financial services. Contact an agent to receive guidance through merging insurance, or use the banking and financial services from Farm Bureau Bank.
