Should Married Couples Share Their Finances or Keep Their Money Separate? Part 1

Whether you are just getting engaged, in the honey moon stage, or have spent a life time together; the question of combining money is extremely important for most to make and only a passing thought for others.

The tradition of automatically pooling funds can be hard to break. It works well for some couples but the discussion of whether to pool your funds, keep them separate or a combination of the two is often a very difficult subject to approach.

Money problems are often cited as the most common trigger for arguments and one of the top reasons that married couples get divorced. Before walking down the aisle couples should spend a great deal of time discussing their feelings about money and deciding how they will handle finances from paying the electric bill to vacations to retirement. At the same time they should decide whether or not they will share their money, in whole or in part or not at all.

While the ultimate decision varies from couple to couple – many financial advisers recommend that married people each have some separate finances (including bank accounts and credit cards) and have a joint account for certain shared expenses (such as mortgages, child care, groceries, investment goals, etc.).

Separate Not Secret – Please keep in mind that separate does not mean secret. Avoid financial secrets as any secrets can be devastating to a marriage.

Some of the Basic Reasons to separate accounts include:

From simple things like:

Avoiding the frustration when your spouse forgets to tell you about checks written, ATM withdrawals, charges on your credit cards, or an eBay addition.

Protection – Protects at least the separate portion of your money from these factors as well as when there are more difficult issues that can arise when a marriage goes sour.

To more complicated Financial Issues:

Examples include those that are brought into the marriage, such as:

Issues from previous marriages, child support, alimony,

When one spouse brings a ton of debt into the marriage,

If one spouse is a spendthrift, a gambler, impulse buyer,

If one spouse gets the “its my money” bug. or

If one spouse brings a great deal of money, property or an anticipated inheritance in. (This is a good time to ask “Do you need a pre-nup?”)

Be sure to look out for Part 2 of this article to learn more and to help you decide if sharing all of your money with your spouse is right for you.

If you have feelings as to whether or not couples should share finances or example of good or bad experiences related to sharing (or not) finances please feel free to share them below in the comment section. The more people know about the good and bad that can occur the more likely they will be able to make a comfortable decision as to how to handle their own situation.

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5 Ways to Organize and Stay on Top of Your Finances in 2011

If 2011 is going to be the year you get ahead financially, you need a plan to stay organized and on top of your bills and cash flow. Missing bill payments, spending without a budget and not monitoring your bank accounts can end up costing you in the long run, and will make it harder to keep your financial house in order. Getting your bills and cash flow organized is essential for staying on top of your finances in 2011m and these activities can also help you budget better all year long.

Use these five tips to stay organized and on top of your finances in 2011:

  1. Create a budget blueprint. You can use financial software to make a budget, or just create your own using your favorite spreadsheet software. The goal is to create a basic outline of your cash flow – a comprehensive list of your monthly fixed and variable expenses, all of your income sources, and any big purchases you expect to make within the next six to twelve months. Use this blueprint as a guide and reference it regularly (see #2) to keep your finances organized.
  2. Review and revise your budget at least twice per month. Keep a close eye on your expenses and make sure all of your bills are paid on time by reviewing your budget or cash flow statement at least twice per month. Make sure you write down confirmation numbers of bills you paid online so that you can correct any mistakes easily.
  3. Pay your bills on a schedule. If you can’t pay bills as soon as you receive them, at least have a plan to pay them on a specific date – well before the due date. One of the easiest ways to organize and stay on top of your finances in 2011 is by creating a bill payment schedule or calendar. Keep this calendar or schedule in a visible place so that you never miss a bill payment again.
  4. Create a monthly checklist of luxury or extra expenses. Are you planning on purchasing a big-ticket item this month? Are you looking to splurge on something for a special occasion? Create a list of these “upcoming” expenses so that you can add them to your budget and keep track of your expenditures. Forecasting your expense in this way can help you better organize your finances and may also prevent you from overspending.
  5. Open at least one checking account at a local bank. Even if you do most of your banking online, stay organized and don’t worry about check cashing by having an account at a local bank. Open a checking account at a local bank so that you can get an ATM fee-free debit card, and also cash your checks without having to pay a fee. Make sure you understand what your limitations are with this account and that you understand the minimum balance you have to maintain in order to avoid fees.