A representative from the National Endowment for Financial Education discusses with us how to merge finances with your partner or spouse.
"Newlyweds need to discuss at least three things in this first conversation, something as mundane as how to divide up household expenses, and there's no right way. You can do a 50-50 split, or if one partner makes a lot more money than the other, then they can look at something that's a little more proportionate to each person's income. The second thing is maybe setting up some small discretionary spending for each partner. Something that maybe covers say to day expenses, the daily coffee. And the third is understanding the credit history and credit score of their partner. And unfortunately a survey we did just a few weeks ago shows that over half of Americans didn't know their partner's credit score before they got married and that has such an effect on joint financial transactions," said Patricia Seaman, Director of the NEFE.
And the best plan of action where there's a disagreement on how to handle money?
"It's understanding where your partners coming from. There are different money personalities, we've heard a lot about spenders who marry savers and what you really need to do is talk about why something is so important. Do you want to save because you need to feel secure and know you'll be taken care of in retirement? Do you want to spend because you really enjoy adventure, vacation? And that can be the starting point for either negotiating a compromise, or giving in to one partner or the other. At least you'll know why you're doing it," Seaman said.
The report finds more than half of people say they've hidden cash from their spouse. So how can people avoid going down that road? "A lot of it is being open, being transparent. For example, your partner insists on handling all the bills themselves, they won't let you in on the process or they're defensive talking about money. That's when you need to go to them and say hey, what's going on? Let's get some things out on the table. Let's look at credit card statements together and bring transparency back into relationship, otherwise you run the risk of destroying the trust in the relationship and it can lead to destruction of marriage itself. So, you need to keep having conversations even after your wedding," Seaman said.
If you'd like to learn more about marrying your money, you can find more information posted under the "Seen on Fox 34" link.
