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One of the crucial financial decisions a couple should make is to choose whether or not to combine their accounts. Such a decision is specific to every couple’s needs. A spouse may decide to have his/her finances separate. The best way to simplify your finances as a couple is by combining your accounts.
Create a Solid Plan for Your Married Finances
You set your life as a couple up for all kinds of success and stability in the future if you have a solid budgeting plan. After deciding to join your bank accounts, the two of you need to stick to a specific budget. You also need to ensure that you and your spouse agree on any financial decisions made.
Pros and Cons of Combining Finances
You have the opportunity to gain several benefits by having your accounts combined. As a couple, you’ll have better interest rates and credit scores since your account has more cash in it. You also get to gain more credit card points and redeem them as you wish.
On the downside, your spouse’s bad spending habits may affect your current credit score and future savings. You should scrutinize each other’s accounts to ensure that there aren’t any issues with money management. You may also find it hard to split up the combined accounts if you divorce.
The Best Time to Combine Your Accounts
Consider having every document related to the joint accounts signed, sealed and delivered before joining your accounts. You should also have a valid marriage certificate and social security cards in place. You should use your married names when combining accounts.
Creating a Household Budget
Take time to evaluate your current expenses if you want to prepare a household budget. You should also consider your fixed expenses such as mortgage/ rent and utilities. Such information gives you more clarity needed to plan for your fixed and discretionary spending budgets. You’ll also get to track your expenditures and cut unnecessary expenses.