The financial benefits of marriage provide multiple reasons for many people to wed. And while money should not be the sole reason for matrimony, couples with two incomes can usually afford a better lifestyle than singles. Their combined ability to achieve financial stability and creditworthiness, realize greater buying power, and prepare for a better retirement are all incentives to say, "I do." Two are better than one; because they have a good reward for their labour. For if they fall, the one will lift up his fellow: but woe to him that is alone when he falleth; for he hath not another to help him up. Again, if two lie together, then they have heat: but how can one be warm alone? And if one prevail against him, two shall withstand him; and a threefold cord is not quickly broken" (Ecclesiastes 4:9-12).
Money or the lack thereof can either make or break a marriage; but the decision to settle down may be the beginning of financial stability. When individuals decide to marry, making an assessment of assets and liabilities will determine the future fiscal fitness of the marriage. Couples should first determine what individual debts will be carried over into the union. If one spouse has an outstanding student loan or medical bill, the decision must be made whether the debt will be paid as a single or shared as a couple. Delinquent debts must also be dealt with so that the liability for individual indebtedness does not ruin an innocent spouse's credit. Full disclosure is necessary if two people plan to marry, because in a court of law husbands and wives can be equally liable for unpaid bills. Imagine how distressed a newlywed will be to discover that their credit is ruined by a new husband or wife! The two should also determine if it will be necessary to have separate or joint bank accounts, or both; and if they can afford to start saving. One of the financial benefits of marriage, especially in a two-income home, is that there are additional resources available to manage debts and achieve financial stability. Setting up a monthly budget will enable newlyweds to better handle combined income and combined liability.
In an uncertain economy, it is wise to have more than a single income stream; and husbands and wives who can contribute to the household financially stand a better chance of keeping their heads above water. In the event that the primary breadwinner becomes too ill or disabled to work, a second income can keep the family afloat. Unlike singles who may defer making financial plans, married couples tend to set present and future financial goals, especially when children are involved. They are unlikely to splurge on big ticket luxury items, such as vacations, electronics, or expensive cars that appeal to singles. Couples willing to pool resources can realize the financial benefits of marriage by making prudent choices about routine spending and saving for future big-ticket items, such as a new home or vehicle.
To a lender, the financial benefits of marriage are obvious: married couples tend to be more credit worthy. While singles may change jobs and move more frequently, those who are married will likely stay in the same career and the same neighborhood longer. Job security and residential longevity are important to lenders, thus giving stable married couples the advantage over carefree single loan applicants. Lenders will also lean more favorably toward families where both spouses are employed because the loan is more likely to be repaid and thus, two-income households tend to be more creditworthy than singles. Mortgage companies know that in the event of an untimely death or disability of the primary borrower, the surviving spouse may be able to keep up payments, or a death benefit may pay off the loan in its entirety.
When it comes to buying power, or the ability to purchase larger ticket items, the financial benefits of marriage cannot be overstated. While an individual spouse's income might not qualify families to purchase a home or automobile, combined incomes boost their buying power. Lenders are able to take into account the sum total of both salaries and qualify couples for a larger loan that may better suit their needs, especially for a growing family. Dual incomes also offer more spending flexibility. While the temptation to spend more because there is more to be spent should be avoided, two-income families are better able to stretch their dollars to meet unexpected bills, save for college and vacations, or invest in stocks and bonds or purchase CDs.
Finally, the financial benefits of marriage offer couples the ability to retire more comfortably than singles. In the golden years of life, single retirees often must seek part-time employment to make ends meet. But husbands and wives who together plan and save throughout the marriage through Individual Retirement Accounts (IRAs), 401ks and other employer provided plans, can realize brighter days in the eve of life. They have learned how to budget have learned how to prepare for the future and are more likely to set aside savings, stock portfolios, and other investments to safeguard the future and provide a comfortable lifestyle for later years. The financial benefits of marriage also include home ownership and the opportunity for qualifying senior adults to obtain a reverse mortgage if needed, applying for a loan based on home equity. A reverse mortgage provides a source of retirement income without the worry of paying it back. As partners make plans to head to the altar, making an assessment of the financial benefits of marriage and how they impact the quality of life for the future is invaluable.
Separate Finances In MarriageSeparate finances in marriage may seem like a good way for couples to avoid conflicts over money. However, when partners do not work together on finances conflicts can be the result. Working together to obtain goals can bring about greater financial success than having separate bank accounts. Couples need to be sure they understand the financial goals of their partner before getting married. Unfortunately many couples while dating do not find out about differences until after they have married. One person may be a saver and the other may be a spender. This difference can cause a lot of conflicts later on. The person who likes to spend may not be able to curb the shopping addiction that has become a habit. This could lead to being deceptive and even lying to one's mate who wants to know where the money is. When one person wants to have separate finances in marriage the other person may disagree. Putting resources together can actually help couples to save money to buy a home or pay for college. "He that putteth not out his money to usury, nor takes reward against the innocent. He that does these things shall never be moved" (Psalm 15:5).
Mates that keep money separate may feel free to spend any extra that lingers in the bank account after paying bills. In order to avoid conflict mates need to sit down together and talk about the money issues that are important to them. If both people agree that keeping separate finances in marriage is best then it might be worth a try. Some mates may find out later that they have changed their mind and decide to have a joint account. Whatever is decided the main issue is to compromise and try to come to an agreement early on in the relationship.
Many adults have not been taught how to save money and pay their bills timely. They live from paycheck to paycheck and wonder where the money has all gone. This can be a problem when emergencies come up. Separate finances in marriage could become one-sided. If the saver of the two adults is always bailing out the spender then resentments can arise. Resentment over money can eventually lead to arguments. For example, let's just say that Tom is afraid to spend money because he recognizes that he might need money for an emergency. Sue, however, likes to shop and often runs out of money before payday. When this happens she has to ask Tom for money to put gas in her car so she can make it to work. Tom becomes resentful because he is always bailing Sue out by using his savings. This type of conflict can be avoided if there is an agreement between the two in the beginning.
One mate may have a lot of debts going into the marriage. The other mate does not feel like he or she should have to help the partner pay debts off. In this type of situation separate finances in marriage may seem to be the answer. While it might be the immediate answer there is no guarantee that it is the answer for the future. Partners need to have continual communication about money issues especially when there are changes in income or when there is a desire to make a large purchase such as a home.
Financing a car or paying interest of any kind might be something that is taboo to one spouse. The other spouse may feel like paying interest is the best way to make purchases. The spouse who does not want to charge anything prefers to save up for whatever is needed before making a purchase and then just paying cash for whatever it is. If the spouse who prefers to pay interest and buy now disagrees then an argument could be the result. This is one reason why some couples prefer separate finances in marriage. Spouses split the household bills and then each person has their own money to buy whatever they choose or to save and pay cash later on. There are ways to overcome differences in money handling. One way may work for one couple but not another couple. In order to avoid misconceptions about money issues spouses need to have lots of discussions on how money is to be handled before the wedding.
Credit issues are not based upon individual accounts when two people are married Separate finances in marriage do not matter when it comes to credit issues. When two people are married debt problems will appear on both of their credit reports even if an account belongs to just one of them. Even after a divorce debt problems that took place during the union will haunt a partner for years afterwards. This is especially true in states that are community property states. Creditors do not seem to honor divorce paper agreements when it comes to collecting on defaults.
Having a budget is very important even if mates decide to have separate finances in marriage. Spending unnecessarily is a main problem when it comes to finances. If mates can agree upon following a budget and allocate only so much for expenditures then they will be much more successful in managing debt. Debt in and of itself can cause havoc in a marriage. When there is not enough money to live on because of monthly debts then everyone in the family suffers. This can cause a lot of tension in any household. This can be avoided if the family is on a budget that makes sense for them. Also, avoid credit card debt above all else especially with accounts that have high interest and multiple types of fees. Making the minimum monthly payment will not pay them off. In fact, making only the minimum payment will hardly even make the balance go down because most of the monthly payment is applied to interest and fees so very little goes toward the principle.