Married couples are not required to combine their finances. You don’t need to get joint bank accounts, nor do you need to file your income taxes jointly. But many couples do opt to combine their finances and it’s a move financial expert Rachel Cruze champions.
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In a recent post on her YouTube channel, Cruze discussed how you can not only manage your dual income as a married couple, but also how you can maximize it.
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Open a Joint Bank Account
First, Cruze recommended that spouses share a bank account. This may feel strange if you’ve only ever banked as an individual, but you’ll get used to it after a while and appreciate how much it helps to simplify money management as a couple whose financial lives are now legally intertwined.
“There is something about combining your money and saying, ‘Yes, we are one. When we get married, we are not two teams running on two different paths,’” Cruze said. “‘We are sharing a life together.’”
There are times, as Cruze noted, when sharing a bank account isn’t a smart move. “If you’re in a marriage and there is addiction that’s not being addressed, or if there is infidelity, loss of trust, possible divorce, abuse, anything like that, then yes, have separate accounts,” she said.
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When Budgeting, Combine Your Incomes
When budgeting, don’t just look at your income, also look at your spouse’s. You’ll have a much clearer picture of where you stand financially as a unit by doing this and you’ll be able to see the full potential of your earnings. Cruze recommended that you sit down every month with your spouse to go over your two-income budget and set priorities.
Know Each Other’s Money Tendencies
You and your spouse may have a lot in common, but you’re still different people. If you were to be set loose in a mall with $500 each of free money to spend and anything you want, you’d probably head in different directions to shop. And you may have different tendencies when it comes to money. It’s critical that you learn as much as you can about your spouse’s money tendencies. And that they learn all they can about yours.
“We all have natural tendencies when it comes to money … your spouse may have different tendencies,” Cruze said. “That’s great, but understand those.”
Be Ready With a Plan for Big Financial Changes
Changes are inevitable and they can rock the foundation of an ill-prepared couple. One of you may lose your job or decide to change careers. You may have a kid or relocate or start caregiving for an elderly loved one. The list goes on. The key here is to be ready for big changes by having a plan of how you will handle a financial loss, along with a plan of how you will handle a financial gain.
Invest Regularly and Separately, Including for Retirement
We often hear not to put all your eggs in one basket. That’s good advice. But it doesn’t end there. You should also, if married and each making money, have two baskets.
“Because you’re earning two salaries, both of you can have separate retirement accounts,” Cruze said.
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Sources
Rachel Cruze, “5 Ways to Maximize Your Money in a Dual-Income Household.”
This article originally appeared on GOBankingRates.com: Here’s How To Maximize Your Income If You’re in a Dual-Income Household, According to Rachel Cruze
