Fathers of the bride have complained for centuries about the expense of weddings. But what if they had it easy?
The Independent News reports that the average UK wedding, at around £30,355, has never been more expensive. But, so as not to miss out on the trappings of holy matrimony, many couples will take out a wedding loan together to pay for their dream day. For love stricken couples, taking out a loan for a Hollywood wedding can seem like a great idea. But cooler heads recognise that a shared mountain of debt isn’t neccassitly the first act in a happy marriage story. A marriage, they say, is for life and the decisions you take now will shape your finances, and your relationship, for years to come.
Couples often wonder whether they should merge their finances. In the process of becoming a joint heart and soul, it seems only natural. For better or for worse after all, right? Wrong! Before you tie the knot, take the time to consider how merging your finances will impact on both of your lives…and your marriage too.
When it’s Not a Good Idea to Merge Finances after Marriage
For many, the next step after getting married is joining finances. Although convenient when doing the weekly shop, it can also bring misery to your lives. Below are a few instances where couples should consider keeping their finances separate:
- The couple consists of one spender and one saver.
The difference in spending and saving styles will eventually lead to resentment and arguments. To try and find balance in this area, couples should draw up a household budget that both parties contribute to.
- One partner has high credit card debt or a poor credit rating.
When you merge your finances with an over indebted partner, your credit rating could plummet and you might find that the task of tackling a large debt together makes you question why you ever said “I do” in the first place. Keep in mind that even if you don’t join your finances, if you and your partner apply for joint debt such as a home loan together, your partner’s debt or poor credit could result in a loan rejection.
- One partner has an addiction problem.
Combining finances with a partner who has an addiction problem can only ever end in tears. It could be a drug addiction, a gambling addiction or even a shopping addiction. Regardless, once the responsible partner works out why their money keeps mysteriously disappearing, resentment is bound to grow.
The Benefits of Joining Finances When Getting Married
Of course, there are possible risks to combining finances with your partner when you get married. But there are benefits too. Some of these are listed below:
- Saving towards retirement.
Saving for retirement alone won’t allow you to earn the same amount of comfort in your old age as saving with a partner. Couple retirement plans often come with perks and pluses – it’s easier to save more each month when you work at it together.
- Pay down debt quicker.
As a couple with combined finances you can come up with a plan to pay off your debts, such as wedding loans and other expenses, as quickly as possible. Some couples even consolidate all of their debt into one affordable loan so that they can start their lives together without the burden of heavy bills to pay each month.
- Reach short-term financial saving goals quicker.
When a couple joins finances, it makes it easier to save towards short term financial goals together such as a holiday, new furniture or a new car.
- Buying a new home together.
Most newlyweds dream of buying a brand new house together that they can truly make a “home”. Home loans aren’t easy to get but if you both have a good credit rating and your joint finances prove affordability, you should be able to get a home loan to buy the house of your dreams. Of course, it is advised that you put some time into realistically calculating your affordability when it comes to a home loan. The UK Money Advice Service provides some advice on figuring out how much you can afford to borrow for a mortgage.
Make the Money-Merging Decision Responsibly
Getting married is the perfect time to start acting responsibly. Sit down with your partner and have an open conversation about your finances. Both parties should be aware of possible high debt and poor credit records. Together, you can decide whether it is best to join finances or keep them separate for the long haul. Don’t make a decision that is just good for you or your partner, but make one that is good for the relationship in the long run. Transparency, responsibility and respect are key to enjoying marital, as well as financial harmony.