According to TheKnot.com, 80% of all weddings take place between May and October each year. We're officially in wedding season! Many important decisions are made when planning a wedding, like picking your venue, flowers, and deciding which family and friends make the cut on the guest list. Yet, even more important decisions need to be discussed during this time as well: how will you and your partner handle your family finances?
- Be on the same page: Regardless of what you come up with as a family, it's extremely important for both partners to be of the same understanding of the budget, how the money is spent, and what goals you are both working towards. Just as with everything else in marriage you must work as a team towards a common goal for your family. Sit down together and review all sources of income, savings, and have meaningful discussions about each partner's thoughts on money. Talking about money can sometimes be a tense conversation so think about ways you can find a middle ground so neither partner feels like there is too much or too little spending.
- Make bank account decisions: Bank account decisions are often one of the first steps discussed after marriage. Having one joint bank account for all household funds may not be for everyone, and that's okay. Many couples keep separate bank accounts and have one joint checking account with a set draft coming in each month to cover household expenses. Other partners choose to pay a percentage of each bill every month or are individually responsible for set bills. Regardless of what you choose to do, this is one of the most important decisions you will make.
- Set Rules: Combining finances doesn't mean you should lose your privacy or have to ask before making a purchase. You can implement the dollar limit rule: If one partner wants to make a large purchase over a set dollar amount, they must talk to their spouse about it. This could even be as small as purchases over $100, but it reinforces the idea that the money is household money and large purchases affect everyone in the household. Make sure to discuss with your partner what rules you think would benefit your household, and come to an agreement on what is the best fit.
- 50/20/30: The 50/20/30 rule is our standard "budgeting" rule at oXYGen and we believe it's one of the easiest ways to set a budget. 50% of your income goes to needs like the mortgage and groceries, 20% goes to savings, and 30% goes to your wants. This is an easy way to keep the household spending under control while not having to stress about each and every dollar you & your partner spend. By following this rule, you will be able to structure your budget to cover needs and wants for both you and your spouse.
At first combining finances can be scary and it can be hard to feel like you have to answer to someone else, especially if that wasn't your norm before marriage. If partners can get on the same page spending wise, you will be well on the way to household harmony.