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<March 2015>



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Marriage and Money: 5 Tips to Combining Finances When You Get Married


combining-finances-when-you-get-marriedCouples face a number of changes when they decide to get married and combining finances might be one of the most important. Before walking down the aisle together, schedule a date to address your financial future together. Here are some valuable tips to help make “having the money talk” less stressful.

1. Communication Is Key

The first step is to acknowledge the importance of the money conversation and to bring it all to the table. It is essential to be on the same page about how money should be spent, saved and invested.

It’s also important to be honest and transparent with each other about your current finances, savings, and debt. If you are committed to the marriage, then it’s no longer my money and your money or my debt and your debt. Think in terms of OUR money and OUR debt.

2. Define Financial Goals Together

Merging finances after marriage is not a decision to take lightly. It’s important to talk to your partner and come up with a plan that works for both of you. Understand what is important to each of you. One may want to buy a house while the other feels saving for retirement is more important. A good first step is to write down your individual financial goals. Outline both long and short-term goals, and write down a few wants you would like to work toward such as a vacation or a new car. Once your lists are developed, come together and prioritize the goals you share and compromise on individual goals.

Seeking the help of a professional financial planner is also a great option. A professional can help you develop a solid financial plan to help you accomplish your goals.

3. Create A Monthly Budget Together

Next, prepare a budget that includes all of your monthly income and expenses. Include savings for short-term goals and retirement as well as a plan for discretionary spending. You can designate one spouse to be in charge of managing the budget, or you can take turns keeping records and paying the bills.

Sit down together every month and review the budget and see what needs to be adjusted and what expenses you need to prepare for that month, etc. Being disciplined and sticking to the budget can be tough for some, but the accountability of working together can be helpful.

4. Establish A Joint Account

There is no right or wrong way to approach this milestone. You have to decide what is reasonable and what works for you. You might decide the best option is to close your individual accounts and start fresh by opening a joint bank account. The answer should depend on your individual situation.

Some couples prefer to open a joint account while also keeping individual accounts. Collective expenses like rent or mortgage and utilities come out of the collective pot and discretionary expenses are paid for individually. It will differ from couple-to-couple on how to share financial responsibilities and how to contribute to the joint account.

5. Establish An Emergency Fund

No matter how much you plan and communicate, you may still experience a bumpy financial road in the future. Not having the money on hand to handle emergencies can create both financial and emotional stress. A good rule of thumb is to have six months of your post tax income set aside in an easily accessible savings account. Make the decision to save at least 10% of your income each month. After saving enough cash for an emergency fund, invest in a retirement account.

In the end, transparency, communication, and teamwork are necessary for matrimonial financial success. The planning decisions you make today can have a lasting impact on your future. At Lakeland Bank, our financial advisors will help you plan for all stages of life, developing both long and short-term financial goals. For more information or to answer any financial questions you may have, feel free to contact me at (973) 208-6214 or jbuonforte@lakelandbank.com.

*Securities are offered through Essex National Securities, LLC, member FINRA & SIPC. Insurance products are offered through Essex National Insurance Agency, Inc. Neither are affiliated with Lakeland Bank. Products are not guaranteed by the bank, not FDIC insured, not a deposit, not insured by any federal government agency, and may lose value including loss of principal.

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