There are lots of items contained in standard marriage vows regarding “love, honor, cherish, etc.” But there are very few that regard the all mighty dollar. In our experience, this is a leading cause of marital strife and not to be trifled with. But for those who know how to get a running start by using our bookkeeping tips for married couples, it can be an asset.
1. Know Before You Go
Your new spouse may be wonderful in many ways, but they may also be riddled with debt. Once you say your “I do’s” you are now riddled with debt. This is why it is important for both spouses to know exactly what they are getting into financially. A simple credit report can tell you everything you need to know.
Remember this is not the equivalent of asking for a prenuptial agreement, but it can be a sensitive subject. Offer to run a credit report for yourself as well. There may be items on the report that neither of you are aware of. And if you already have a report that is less than six months old, feel free to use it.
Extra bookkeeping tips: How you can get a credit report on the cheap.
- Discover Card – Do you or your future spouse have a Discover card? They already give you a free credit score for free in each monthly statement.
- Credit Sesame – This company offers free credit reports with no credit card needed to sign up.
- Credit Karma – Similar to the above, this will also give you a free credit report with no obligation.
- Annual Credit Report – The official government site will allow you to request one free report per year.
2. Have the Talk
Engaged couples talk about everything else, why not money? Engage with your spouse to be on what your spending priorities are and listen to theirs. Common items include what kind of house to live in, how often to get new cars, what counts as a splurge, when do they want to retire, etc.
3. Create a Budget
No matter how much or little you expect to take in as a married couple, it is essential that both spouses know what to expect. This includes how much should be spent for living expenses, splurges, savings, and charitable giving. Have the budget printed out and dated so there is no question as to what was agreed on. Remember that this budget is not set in stone and is allowed to be modified should financial circumstances change for the better, worse, or for children.
4. Allow for Fun
Let’s say you make $5,000 per month as a married couple. You spend $1,500 for your living expenses, another $1,000 for home and health insurance, and $500 on auto expenses. That leaves $2,000. Assuming there are no other agreed upon necessary expenses, that leaves $1,000 for each spouse to spend as they like. So let your spouse buy a new pair of shoes or big screen tv if they like. Encourage them to save and/or give to charity but don’t insist on anything beyond the aforementioned agreed budget.
5. To Join or Not to Join
Now that you’re married, should you have joint checking accounts, credit cards, etc.? Technically, all your accounts will be joint, meaning that you are responsible for your spouse’s spending as they are for you. So do whatever you think would work best in this regard.
6. File Jointly or Separately
We could give you a bunch of bookkeeping tips on how filing your taxes married but filing separately vs. married and filing jointly works. However we will just tell you that for the year 2016, the standard deduction for those who were married and filing jointly was $12,600. Married couples who filed separately only got a total of $6,300. Of course, these are not hard and fast numbers and you should speak to your own bookkeeper about it.
7. Get a Pre-Nup (optional)
Different couples will have different opinions on if and how to proceed with a prenuptial agreement, if they are even willing to consider one at all. Those who should definitely consider an agreement of this sort are those who are on their second or more marriage or are under the age of 21. This is because these couples in general exceed the average divorce rate and are more likely to have things go badly. A prenuptial agreement will save both spouses thousands, if not tens of thousands, of dollars in legal fees should the worst happen.
Extra bookkeeping tips: In short, a prenuptial agreement states that what each spouse owned before the marriage remains theirs in the event of divorce. What the couple earned after the marriage is split between the two.
Bookkeeping Tips for Married Couples in Houston
And if you are a married couple or engaged couple living in Houston or the surrounding area and need bookkeeping help, please contact me.