How are you planning on handling money after the wedding?
Original post by nov04LIbride
How are you planning on handling money after the wedding? FH is in debt, and I saved quite a bit but am using my savings for my doctoral program (and the downpayment for our condo and the wedding), so we were thinking separate accounts, and one joint account for shared expenses. What is everyone else doing?
sarahthegreat
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Re: How are you planning on handling money after the wedding?
i have to say, i don't see how some people see it as 'mine' and 'yours.' imo, it is 'OUR' money and will go into one savings acct., until we know what want to do with it. it will most likely go towards a condo/co-op and towards some cc debt that we both have. JMHO
David'sbride
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Re: How are you planning on handling money after the wedding?
Someone brought up divorce...
Unfortunately, I know a bit about this from close friends. Separate accounts does not allow you to keep the money from him if you win the lottery. In the state of NY you are not allowed to do that.
Yes, when you marry you are legally responsible for each other. If you marry someone in debt... ladies, it's your debt too.
If you marry someone who racks up $$$ of dollars on his separate credit card... yes, you are equally responsible for it in the eyes of the law.
For all of these above reasons and many more, I urge you to have a serious discussion about how both of you view money.
FH was married once before to a woman who had a lot of issues. He's like me, I can't stand to be in debt... but she was a nightmare with money and never worked regularly (no kids). It put a lot of stress on their marriage. He only found out right before they separated that she racked up $18K in credit card debt on her separate card and never told him. Yes, in the eyes of the law that was his credit rating too.
There are a lot of great books out there... Suze Orman who discusses that there is a lot of psycological reasons for how we handle money.
Sorry, so long but most people don't feel comfortable talking about it and it results in major problems down the line and I wouldn't want to see another couple go through what I have seen. Money compatibility is a big factor for success of a relationship.
akaMrsT
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Re: How are you planning on handling money after the wedding?
Posted by David'sbride
Someone brought up divorce...
Unfortunately, I know a bit about this from close friends. Separate accounts does not allow you to keep the money from him if you win the lottery. In the state of NY you are not allowed to do that.
Yes, when you marry you are legally responsible for each other. If you marry someone in debt... ladies, it's your debt too.
If you marry someone who racks up $$$ of dollars on his separate credit card... yes, you are equally responsible for it in the eyes of the law.
For all of these above reasons and many more, I urge you to have a serious discussion about how both of you view money.
FH was married once before to a woman who had a lot of issues. He's like me, I can't stand to be in debt... but she was a nightmare with money and never worked regularly (no kids). It put a lot of stress on their marriage. He only found out right before they separated that she racked up $18K in credit card debt on her separate card and never told him. Yes, in the eyes of the law that was his credit rating too.
There are a lot of great books out there... Suze Orman who discusses that there is a lot of psycological reasons for how we handle money.
Sorry, so long but most people don't feel comfortable talking about it and it results in major problems down the line and I wouldn't want to see another couple go through what I have seen. Money compatibility is a big factor for success of a relationship.
Wow - sounds like my FI's ex (girlfriend not wife). She racked up $20K in credit card debt (and cash advances) when they broke up. They had joint credit cards and he had all of $800 on it. He is almost finished paying it off now and expects to be finished with it this month.
As for joint accounts, husbands (and wives) old debts can come back to haunt you. The reason FI and I even got on this topic was when a family member of his had an account frozen because of the spouses old debt. There was some old judgment that had been discharged but the collections agency that bought the bad debt did not show that it was paid.
They attached (froze) the joint account which caused the mortgage check to bounce and that account had a direct deposit linked to it. So, for a few weeks while the mess was sorted out, the account was frozen.
In the end, it was resolved since the spouse had previously paid off the debt but it was still an ordeal. Also, the spouse with the debt was added to that joint account only a few months before all this happened. Prior to that, there were no joint accounts. The spouse without the debt had to go through a few hoops to prove that all of the money in the account was from direct deposits from work and not part of any joint funds. There were a lot of records to prove this so it was resolved fairly quickly.
This happened to another friend too - same result but there were two small kids to take care of for a few weeks w/o any access to money.
So, I wrote all that to say that spouses are held responsible for each other's debt.
Keeping a separate is always a good idea.
ltlbkworm4
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Re: How are you planning on handling money after the wedding?
We have a joint checking and joint savings and I have my own savings as well
pmnkm
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Re: How are you planning on handling money after the wedding?
Posted by Laura1976
right now we have seperate accounts, but we kind of pay for things as we go. My FH has bailed me out of credit card debt once or twice (nothing major) but he hates have debts hanging around for no reason. We're pretty nonchalant about it, his money is my money, and I for some reason never have any money.
HA! That is exactly how we are...he's got all the money and I don't have any! We are going to combine when we marry but I will probably keep a small seperate account. Just for things I want to buy with my own money.
marc_rai
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Re: How are you planning on handling money after the wedding?
Posted by snowprincess805
i read alot of financial books- and the way i am doing and heard is the best- is you each have your own accounts and then a joint account - from driect deposit - you both put the same percentage amount into the joint account - and then the rest into your own account - it makes both more parties equal for household expenses - when they earn different amounts
My FH and I both wondered about this method and we think it's kind of unfair for the one who makes less money. For example, let's say one person makes $70,000/year and the other makes $35,000/year. If you each decide to put 60% of your income into the joint account, then the one who makes $70,000 contributes $42000 and the one who makes $35,000 contributes $21000 to the joint account. That means that the one who makes $70,000 would have $28,000 whereas the one who makes $35000 would only have $14,000 for personal use. It just doesn't seem fair to us. I think this idea works when both parties earns around the same amount, but if there is a huge difference income then the one who makes less is kind of at a disadvantage. This person has less money to invest, to spend, to pay off debt, than the other person.
marc_rai
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Re: How are you planning on handling money after the wedding?
Posted by nov04LIbride
Posted by kdrainey
If you do divorce though, would one spouse also be held partly responsible for the debt of the other, even if it was debt from that spouse's own account or credit cards (not in both names?)?
Someone correct me if I'm wrong, but I believe the answer to this is Yes if those debts were made during the marriage. Would this able to credit card debts made by one party prior to marriage? Ex. You have credit card debt. Get Married. Get Divorced. Is FH responsible for your credit card debt even though ya'll were not together when you accumulated it?
PS: What does ETA mean??
KarenB
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Re: How are you planning on handling money after the wedding?
I am surprised at this, I didn't think the other spouse would be liable unless you have a joint card together -- it makes no sense to me that you are liable. Spouse or not your credit ratings are still separate I don't see why the liabilities aren't.
akaMrsT
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Re: How are you planning on handling money after the wedding?
Not that I expect that any of us will get divorced but if you have joint accounts during the marriage, close them BEFORE you separate or file for divorce. Open accounts in your own name to establish your individual credit.
Freeze joint accounts. Have the bank require both signatures and tell credit card companies (by phone and in writing) that you want to freeze those accounts as well. You will not be responsible for charges made after that point.
Once you get married, your credit rating is joined to your spouse (like it or not) and this is even if you do not change your name.
After you are divorced, the settlement will take into account all of the debt. The party with MORE debt will likely be given LESS assets. However, even if the settlement agreement requires one party to pay off joint debt, if that party does not pay the other party is still liable for the debt.
As for accounts (debt) acquired BEFORE the marriage, you will not be liable for those UNLESS you comingle during the marriage i.e., take out a consolidation loan to pay off the indebted spouses bills and then pay the consolidation loan off with comingled funds. It becomes more difficult to separate who owes what at that point. But in the end the settlement will take into account who was responsible for what debts i.e. student loans acquired before marriage.
ETA: Having separate credit card accounts is a great idea. However, be aware that if the spouse has a second card in his/her name (same account number) that the second card holder may be liable for past and future charges on that credit card if they sign the card & use it.
goingtobemrs
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Re: How are you planning on handling money after the wedding?
Posted by kdrainey
Not that I expect that any of us will get divorced but if you have joint accounts during the marriage, close them BEFORE you separate or file for divorce. Open accounts in your own name to establish your individual credit.
After you are divorced, the settlement will take into account all of the debt. The party with MORE debt will likely be given LESS assets.
As for accounts (debt) acquired BEFORE the marriage, you will not be liable for those UNLESS you comingle during the marriage i.e., take out a consolidation loan to pay off the indebted spouses bills and then pay the consolidation loan off with comingled funds. It becomes more difficult to separate who owes what at that point. But in the end the settlement will take into account who was responsible for what debts i.e. student loans acquired before marriage.
Are you a financial analyst such as myself? That is what we do here at my job!
