Atlanta Financial Blog

Mergers & Acquisitions: Marriage Edition

Mergers & Acquisitions: Marriage Edition

Harrison Fant, CFP®, AIF®
July 23, 2019

Of all the things we look forward to when planning to get married – from picking a venue to a honeymoon locale – one area we tend to glaze over is our finances.  Conversations about money with our significant others can oftentimes be difficult or uncomfortable, but making sure you are both on the same page about your finances is a crucial part of any relationship.  In fact, studies by SunTrust Bank and Kansas State University found that finances are the leading cause of stress in relationships and the number one reason for divorce in America.  When preparing to join finances in holy matrimony there are several things to keep in mind:

Communication is key.  Finance expert Larry Burkett has said, “Money is either the best or the worst area of communication in marriages.”  Without open and honest lines of communication about our finances, it can be very difficult to go from a mentality of “my money” to one of “our money.”  When Erin and I got married we talked about how we both felt about managing our individual finances and felt that the most likely path to success in managing our money was to approach it as a team.  That means being fully transparent about short- and long-term spending and saving goals so that we can work to achieve them together.

Know your net worth.  One of the most effective starting points in merging your finances is to know where you are today.  Building a balance sheet listing all of your assets and liabilities is a great way of laying your financial cards on the table.  If one spouse has greater assets (or liabilities) than the other, it is important to be up-front about how that will impact you as a team rather than as individuals.  This is especially crucial when it comes to debt planning.  Having a list of all outstanding debts in one place – student loans, car notes, credit card balances, etc. – makes it much easier to create a plan for eradicating that debt and growing your net worth.

Consolidate your accounts.  Of all the conversations I’ve had with married couples about their finances, the question of how to combine accounts has yielded the widest range of answers.  Some couples opt for a joint “house” account that they each contribute a set amount to each month for household expenses.  Others choose to have joint checking and savings accounts but give themselves a set allowance in an individual account to do with as they please.  Personally, Erin and I decided to “go big or go home” by combining everything into joint accounts – checking, savings, and credit cards.  By having all our income and expenses go into and out of a single account, we have found that it is much easier to manage our monthly cash flow and feel comfortable that we can both see where our money is going.

Money has an emotional connection to every aspect of our lives, which means that managing combined finances is one of the most critical pieces to a successful relationship.  By maintaining open lines of communication and working as a team toward common goals, you can make that piece much easier to grasp.  Successfully merging and managing your finances as a couple is definitely a topic that requires more than a few hundred words to cover.  If you and your partner are wondering where to begin, then get in touch with us and allow Atlanta Financial to help you map out your path to financial success.

Share This:

Share on facebook
Facebook
Share on linkedin
LinkedIn
Share on twitter
Twitter
Share on google
Google+

We Welcome Connolly Crowley with Lots of Love!

We are excited to announce Connolly Elizabeth Crowley, daughter of Charles and Erin Crowley, was born on June 21, 2019! Weighing in at 7lbs.,15oz., Connolly makes Charles and Erin the parents of two beautiful children; Connolly is Charles and Erin’s second child…

Read More »

Is a Health Savings Account (HSA) Right for Me?

At AFA, we hear our clients express concerns about two financial challenges more often than any others:
• Will I be ready to retire with the lifestyle I want?
• What can I do to protect myself from rising health care costs now and in the future?

Did you realize there is a single vehicle that can help you make progress in both areas? It’s called a health savings account (HSA), which is a government-regulated savings account that combines many of the tax benefits of a Flexible Spending Account and a 401(k), including:
• Your contributions to the plan are pre-tax (if offered through your employer) or tax-deductible (if established on your own). If funded through your employer’s plan, you also don’t pay FICA on the contributions, putting an extra 7.65% back in your pocket.
• Withdrawals for qualified medical expenses are tax-free (more about that below).
• The balance in your plan (that you don’t spend for medical expenses) grows tax-deferred and can be rolled over from year to year, supplementing other retirement savings.

Read More »

Understanding (and Avoiding) Lifestyle Creep

Over the years we’ve seen plenty of research and studies claim that increases in income don’t correspond to increases in happiness. One such survey, using data from the Gallup World Poll, found that the optimal household income for emotional well being was between $60,000 and $75,000 per year. The research shows that beyond that threshold, the correlation between income and happiness flattens pretty dramatically. For many Americans – especially young professionals just getting started in their careers – this may seem like a bogus finding, but by going beyond the headlines we learn that a common reason for that drop-off in financial satisfaction is lifestyle creep.

Read More »