The f-word. Finances. Combining love and money may be the biggest stumbling block on the path of true love, creating more rifts in relationships than in-laws, drug and alcohol addiction, or infidelity.
Financial power struggles challenge even the most solid partnership. Unfortunately, money too often equates to control in a relationship. The delicate balance of power between you is dependent on the successful combination of love and money.
In the majority of relationships today, both members contribute financial resources. Despite the strides women have made toward financial equality on the job, though, men still have greater earning power. In general, with more disposable income, men invest more money and take greater risks than women. Women as a whole are more conservative in their investments because it takes them longer to earn the money. Money attitudes are also influenced by age, family upbringing, religion, and each person's own unique financial trials and errors.
Everyone has opened a bank account, paid the rent or mortgage, kept the telephone and electricity turned on. When you make the decision to share your life with someone, though, such mundane issues suddenly become complicated.
Do you keep separate bank accounts or do you put all the money in one account? How do you split monthly expenses? Do you each pay a portion or do you pay bills out of a joint account? Should you be able to sign on your partner's bank account? Did one of you bring assets to the relationship that the other uses, such as a car or a home, for which expenses should be shared?
Financial advice for couples over fifty varies significantly depending on age, economic status and dependents. Every situation is different, but the following is general advice for everyone.
Many modern couples keep their finances separate, while others opt to pool all their funds. Making the decision on the day-to-day handling of what was formerly “his” and “her” money can be a tough one.
There are benefits to keeping separate property funds separate and maintaining certain assets in one name only, which we'll explain in more detail in the next chapter. Keeping other monies separate may create logistical problems, though, along with a diminished sense of common goals for the future. Combining your funds also gives a couple greater borrowing and investment power.
Determining a financial plan that works might take months; many couples struggle for years before reaching a balance. Defining and discussing your money styles is the first step, setting goals is the second.
Review your financial picture. Are you both satisfied with your knowledge and control of “your” money and “our” money? Are you both knowledgeable about banking, insurance, investments, credit cards?
The routine business of a new life together should include the following:
- Reevaluation of life, health, auto and other insurance coverage
- A change of beneficiary on insurance policies and company pension plans
- Notification to social security of your marriage to ensure eligibility for your spouse's benefits and change of W-4 withholding
- An assessment of the impact of remarriage on alimony or pension/retirement benefits from a prior marriage
- A consultation with an accountant to learn the impact your marital status will have on your federal or state income tax obligations
- In a remarriage, be aware that the income of a new spouse may impact eligibility for financial aid of college-age children from a prior marriage.
You may need to consult your banker, your employer, your insurance agent, your accountant, your attorney or other professionals to accomplish these tasks.
Your goal in tying the fiscal knot is to protect your spousal rights and save money. Begin your research before the wedding and make sure you follow through. Loveandthelaw.com should be your first stop - it’s an easy and inexpensive way to stay informed.
Johnette Duff is the author of The Spousal Equivalent Handbook: a legal and financial guide to living together, The Marriage Handbook: a legal and financial guide to your spousal rights, and Love After 50: the complete legal and financial guide. Nationally, she has appeared on Today, Good Morning America, CBS This Morning and in The Wall Street Journal, Self, Smart Money, New Woman and Modern Maturity promoting information on love and the law. Ms. Duff has recently opened a web site titled, love and the law.
rauspitz44@comcast.net
