Thursday, February 21, 2008

Together or not Together

I would like to respond to the blog I linked to the other day entitled, “Get Your Act Together, Sisters!”

I want to first address the question regarding the effects marriage has on one’s credit score. I won’t go into detail today about what factors go into calculating a credit score, but you should know that your credit report is tied to your social security number. Even after marriage, each spouse has their own credit score. There is no “average score” or anything like that. The financial decisions each of you have made up until marriage are completely separate. Now, after you say “I do,” things can start to change once you open accounts together.

I highly advocate joint checking and savings accounts (for married couples) for a few reasons:

1. It forces communication between the two of you and provides accountability.
2. It gives you a common goal together as you work to improve your financial situation.
3. It serves as a reminder that the two of you have become one and are committed to a lifetime together.

I would also argue that financial management is just plain easier with fewer accounts to manage, especially if one person is doing the majority of the banking.

Now for a more controversial topic…

I think it is most wise for an engaged couple to keep their finances separate until marriage. I realize an engagement is a huge commitment, but it is not a binding one before God or the state.

One of the main reasons I advocate this is that it forces both of you to live within your means. If one of you can’t afford to pay rent on your own, maybe you should be looking for a cheaper apartment. If you’re struggling to make your own car payments, perhaps you should sell the car. If both of you are living within your means, you should be able to survive independently through your engagement. Then, after you are married, you will see a financial benefit and will be in a much better position to contribute to your savings.

Maybe you are thinking, “What’s the difference? We’ll be married in less than a year anyway.”

Well, it doesn’t make much sense to have the benefits of marriage without the commitment of marriage.

Please comment with any ideas or questions you may have!

1 comment:

Jen said...

Tim, I just met your wife yesterday and her sister (R) recommended her site which led me to yours. I highly agree with your insights into both the separation and later unification of bank accounts. Too many people have this backward and invest in financial commitments together before making a life commitment.

Thank you!