A Newlywed’s Guide to Merging Finances

The honeymoon’s ever, so it’s time to start living in the proverbial “real world” as a united team! (expert advice)

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Congrats! You're married! Now that the honeymoon's ever, it's time to start living in the proverbial "real world" as a united team. With the merging of your lives comes the merging of finances. And while it's no secret that money is one of the greatest stresses in a marriage, sorting out your financial future together doesn't have to be the source of discord. Look at merging your financial worlds as an opportunity to communicate well and plan for a prosperous lifetime together.

Talk Money

Before you walk down the aisle, sit down with your betrothed and have a full-disclosure conversation about what you're each bringing to the marriage: priorities, plans, phobias and debts. Knowing each other's credit rating will help you make decisions about joint accounts, as merging your finances can hurt the credit score of the financially healthier partner. Look honestly at your debt, and decide if a prenup (to protect one's assets from another's creditors) is wise, even if seemingly unromantic. If accounts are kept separate, you're not responsible for the other's pre-wedding debt; merging means you'll be paying it off together. Also talk about the division of labor, bill-paying, and who you see emerging as the breadwinner both now and in the long-term.

Be Unique

There are no steadfast rules as to how you must combine and/or separate your finances. Find an option that works for the two of you. Some couples choose to keep separate accounts, others add joint accounts while keeping separate ones, and others choose to merge completely into strictly joint living. A financial advisor can help with this transition, looking at your priorities and financial values. Maybe one partner is better at handling money and should manage all bill payments and bookkeeping. Maybe your incomes differ significantly and separate accounts aren't practical, or you like the fewer bank fees that come with consolidation. Maybe you like the idea of some financial autonomy and find it convenient to divvy up expenses and keep things separate. As long as you're on the same page, there are no wrong answers.

Budget and Plan

You know the old adage: "Those who fail to plan, plan to fail." When it comes to your financial health as a new family, part of planning to succeed is committing to an ongoing discussion about your budget and investments. Set up a system and develop a written plan. Be honest about your spending priorities and money-management styles. The worst thing a married couple can bring to the money table is secrets. Determine early on to never hide spending from the other. When it comes to differing views on investing, find an advisor to help find a balance between risk-taking and playing it safe. Plan to review your portfolios annually, revisiting your short, medium and long-term plans.

Reevaluate Insurance and Plan for Emergencies

If you change your name post-wedding, make sure all your documentation is updated. Bring a copy of your marriage certificate to your financial reps, as you'll need proof of your marital status before changing account information and merging and rearranging finances. Evaluate your insurance coverage situation. It may be strategic to get your vehicle insurance from the same provider or to consolidate your medical benefits. Also research as to whether marriage will decrease your premiums, and if you need to consider increased disability and life insurance now that you're thinking as a family unit. Draft and/or update your wills to include each other. And plan for emergencies. If you can save three to six months worth of living expenses, you'll create a cushion that will prevent you from panicking and making poor decisions in the face of unforeseen tough times. If your accounts are separate, think about adding each other's names to them for emergency access.

Now that you're married, enjoy the adventure of life together. Don't let an on-paper budget prevent you from having regular conversations about money. Communicate. Consult experts, revisit your plans, and embrace this part of married life as a rewarding adventure.

Images courtesy: Union Photography