This is one time you can't get into bed with each other and merge. Your credit scores remain separate after you've tied the knot. There is no such thing as a marital credit score. Merging your finances is a different animal. You may have been blinded by love and not only be unaware, but not care, how the other feels about money. But it's time for a wake-up call.
Determine how you want to handle living expenses. Your options include splitting the expenses on a pro-rata basis based on salaries. In other words if you earn $3,000 per month and your significant other earns $2,000 per month, you would pay 60 percent of the expenses and your spouse would pay 40 percent. Splitting the expenses equally regardless of income is another option. Setting up a joint account and depositing both paychecks to cover all of your communal bills is a third method. And finally, living off one salary and saving the other is another. It doesn't matter which option you choose as long as both of you fully agree.
Get out all the financial statements, credit card statements, account books, loan statements and investment statements -- stocks, bonds and mutual funds. Pour yourselves a cup of coffee. (A mocha latte goes especially well with finances.) Go through all your assets and determine how those assets can be accessed by either one of you. It may be as simple as adding your husband to your signature card or as complicated as opening completely new accounts. Do the same thing with the liabilities. You may want to keep credit card debts or personal loans separate if one of you has a significantly better credit history.
Keep a list of those accounts where each of you can find it. Include separately held accounts and liabilities on the list. That way if one of you is incapacitated, the other can make any due payments. And while you're at it, consider giving each other power of attorney for medical and monetary decisions. And consider writing a pair of living wills so each of you can make decisions for the other if either of you becomes incapacitated and needs serious medical decisions to be made. Make sure, of course, that you and your spouse are on the same page as to what you want done if something horrible happens to either of you -- but recognize that maintaining control over end-of-life medical decisions within your new family also gives you control over financial considerations that may be bigger than any other decisions you will ever make.
Decide if you want to merge all your finances and assets or only certain ones. Any assets you have before you became hitched, and any gifts or inheritances you receive after you're married, are your own separate property. Unless you deposit those assets in a joint account, in which case they could be considered marital assets. If these assets are significant and this is your second marriage, with children from the first, consult an attorney. Your children need to be financially protected in case something happens to you.
Change the name on the wife's accounts to her married name if that is now her legal name. Not every wife wants to use her married name. If she has established a well-respected professional reputation under her current name -- maiden is such an outdated term -- she may prefer to keep it as her legal name, which she has the legal right to do.
Protect each other's credit scores. While you can't merge the scores, those scores still affect your finances. If one of you was blissfully fiscally irresponsible before the reality of marriage settled in, that history will impact you as a couple. Each credit score will be considered when you purchase jointly owned assets, such as a house or a car, or if you apply for joint credit cards or personal loans. You could purchase the car in one name only, in which case only one credit report will be considered. But if both incomes are included as consideration for a loan -- which is typically the case for most car loans or home mortgage loans -- then both credit scores will be considered as well.
- Once a month sit down with each other and review your monthly expenditures.
- Use only one debit card per account. If both of you have debit cards and use them at the same time, you could unknowingly overdraw the account, which will lead to bank fees for overdrafts. Coordinating debit cards on the same account is certainly possible, of course, but it's a bit of an advanced skill. You might want to work on your basic financial communications skills for a year or so before you try it, particularly if you tend to run your joint account close to zero at any point during a typical month.
- In community property states, debt you acquire after the marriage is a liability for both of you. If, and heaven forbid if it does, if you get divorced in a community property state, each of you is responsible for the entire debt, regardless of the divorce settlement. Community property states include Arizona, California, Louisiana, New Mexico, Nevada, Idaho, Texas, Wisconsin and Texas. Couples can choose community property in Alaska.
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