When Should You Merge Finances?
Getting married is an exciting time, but it’s also a time of change. There are a lot of big decisions to make, including big financial decisions. Here are the questions you might have about your financial state and what you should consider when you’re about to get married.
When Should You Merge Finances?
If you’ve just gotten engaged, it’s best to wait until you’re married to combine finances. As you plan the wedding, you might want to open a joint bank account for spending on the occasion. This also gives you a place to deposit any checks you’ll receive as wedding gifts. Waiting to combine your bank accounts until after the legal marriage makes more sense because at this point you are not legally bound. If you’re already living with your fiancé(e), you might want to create a household account for your shared expenses. This would include money you spend on the rent or mortgage, food, and utilities.
Each partner can contribute evenly based on their income. Ultimately, you don’t have to merge your finances. This is a decision you’ll need to make with your partner, and if you decide to continue with separate bank accounts, that is fine. Just make sure your partner isn’t keeping any financial secrets from you, like a large amount of debt. You should trust your partner with everything, and a lack of trust could cause a serious rift in your future marriage.
How Can You Protect Your Money?
Keeping your money in a bank instead of in a safe in your basement is the best way to protect your money. Banks are insured, making it the safest place for your money. This is true whether you and your partner share an account or not. If you’re nervous about your partner spending your money, you might want to maintain separate accounts. With a joint account, your partner can take out any money he or she likes. Though again, if you don’t trust your partner with your money, you might want to reevaluate your relationship.
Cheap income protection insurance is a great way to maintain your financial status no matter what happens in life. You might find yourself or your partner out of work due to injury or illness. If you couldn’t pay your mortgage without both of your incomes, consider an income protection policy. It will provide you with 75% of your monthly income should you find yourself unable to work. This kind of protection could be the difference between making your monthly mortgage payment and defaulting on your loan. You can compare income protection with iSelect.
What Mortgage Should You Get?
When you’re looking to buy a house, it’s time to start learning mortgage 101. You’ll need to start comparing loan types, considering how much you have for a down payment, what your overall budget is, and how much of a monthly payment you’ll be able to afford. Talk with a mortgage lender about your financial state and what type of home you hope to buy. He or she can help you consider whether or not an FHA loan will be right for you, how your credit score affects your purchase, and if you’ll need to pay PMI (private mortgage insurance).
Ultimately, the type of mortgage you’ll need will vary based on all these factors. Start talking with a professional and learning more about what you can afford. Being a home buyer can be stressful, so learn as much as you can about the process and talk with someone who knows what they’re doing.
It’s always the right time to talk about these financial situations with your significant other, whether you’re engaged or not. Be open about your finances and your spending, and you can work together to reach your financial goals.