Getting married is undeniably one of the most exciting times of anyone’s life. It’s the perfect way to prove your commitment to the one you love, and it’s also an exciting and joyous time.
As you can imagine, there are many considerations to make when you decide to marry someone. Where will you both live? Will you buy or rent a home together? Do you both want to have children?
Those are just some of the many questions spouses-to-be ask themselves and each other!
One of the many considerations to make when getting married is, of course, money. Take a look at the following seven points to learn more about the financial considerations of marriage.
1. Checking Accounts
Most people who get married have to work for a living, and they will usually get paid by bank transfer into their checking accounts. You might ask yourself, what happens to those checking accounts when you get married?
The answer is simple: nothing. It’s still possible to open and hold checking accounts in an individual name when people get married. Alternatively, both spouses may decide that opening a joint checking account makes more sense for their lifestyle needs.
For example, two spouses could use their individual checking accounts for their personal expenses, and transfer money into a joint account for household expenses like grocery shopping and mortgage payments.
2. Solo Versus Joint Mortgage
If you and your spouse decide to purchase a home at some point, one question you’ll both have to answer is this: should you get a solo or joint mortgage? The answer you both choose will depend on what’s best for your needs.
If one spouse has a low credit score, it can make sense for the other to get a mortgage solely in their name. Doing so means there will be lower interest rate home loans available, and that spouse will find it easier to get accepted for mainstream mortgages.
3. Household Expenses
When you both live together, you will have to determine how your household expenses will get paid. Examples of such costs include grocery shopping bills, utility bills, subscriptions like cable TV and Netflix, and landscaping services.
There are two ways to figure out how to pay your household expenses. Firstly, you can divide the bills, so each person pays specific ones that result in a roughly 50-50 split of those costs.
Secondly, have all the expenses paid from a joint checking account, and each spouse deposits precisely 50% of the costs from their income each month.
4. Estate Planning
Estate planning is where you determine what happens to your assets when you die. Part of the process involves figuring out who should get property, money, and other assets when you’re not around.
Usually, the surviving spouse would get everything if no will got made, so it’s worth having a conversation and agreeing on the division of assets before you get a will drawn up.
For example, each of you may decide that you’d like your family home to get sold and the proceeds split among your children.
5. Prenuptial Agreements
You’ve likely heard of prenuptial agreements and have probably read about celebrities or other famous people having them before they got married. But, why should you consider one before you marry?
A prenuptial agreement is a written and legally binding contract that states what happens to assets like property and cash if you divorce or die before the other spouse. Both parties must agree to the terms before it can become a valid contract.
6. Divorce Settlements
There’s no denying that divorces are seldom straightforward and without any issues.
Some divorces can become very messy and take a long time to resolve. There are also times when divorces can become complicated if you have children and must involve a family attorney or have mediation sessions.
Let’s face it: divorce is the furthest thought from each spouse’s mind when they get married. Yet, not all marriages last a lifetime, so you’ll need to keep in mind that if your marriage doesn’t work out, you’ll need to get divorced.
7. Life Insurance
Lastly, couples should strongly consider taking out life insurance policies. When you commit to spending the rest of your life with someone, you want to ensure they won’t have to worry about paying household expenses and mortgages when you’re not around.
A life insurance policy will help secure your spouse’s financial future when you’re no longer around.