Military Spouse Network

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The old saying “more money, more problems” tends to hold truth, even in holy matrimony. Combining finances after marriage can get tricky. Perhaps it’s the reason you’ll find money to be the second-most likely reason for divorce.

Military couples may find it even tougher to stick it out seeing as deployments, trainings and permanent changes of station are constantly changing circumstances. But with some thoughtful planning and communication married couples can merge money matters without hassle and keep the financial honeymoon going.

When you are planning to get married make sure you and your spouse discuss these topics:

Budgeting and finances are major issues in marriage so start off on the right foot.

Budget

You both have expenses, fixed and flexible. The first step is to list them all separately to determine the costs you and your spouse are facing together. This is also the time to discuss overall attitudes towards finances. Things like how much money should be spent on different non-essential items should be outlined.

There are free websites such as Mint.com that provide various budgeting forms and tools to can help get you started when you are organizing your finances together for the first time.  Check out this post by Smart Military Money on how to use these online tools to make budgeting easier. Once you have a projected budget, you and your spouse can use it to compare your actual spending tracked over time.

Deciding to Combine Accounts

• Bank Account: Some couples combine bank accounts, some keep them split and some create a new joint account in addition to their own. It really depends on preference. Combining accounts allows couples to use the same bank source and have a common location. Also, if anything were to happen to you or your spouse, the right of survivorship will transfer ownership to the surviving member. Having multiple people on an account increases the need for constant communication because misunderstanding could lead to incorrect balances and/or overdrawn accounts. As long as there is ample communication and delegated balancing times, couples can easily overcome these obstacles.
• Insurance: Many couples compare their health care benefits and decide which would provide the most benefit if combined into a family plan. With the military, service members and family are offered TRICARE to cover health, dental and pharmaceutical benefits for active and retired members. Auto and homeowners insurance may also offer discounts if combined.
• Cell Phone: You and your spouse can save some money by switching to a family plan for your cell phone providers. In fact if you use your military discount on certain providers, you can save even more.

Delegating Responsibility

Now that pool expenses is under one roof, you’ll have to determine who will be responsible for making payments and performing tasks like grocery shopping. The tasks can be split evenly, given to one person or rotated throughout the year. Couples have found success with each method, so again it’s left to you and your spouse’s preference.

How will the bills get paid?

A specific note for military couples is to discuss having shared access to the responsibility. Spouses of military members should obtain a power of attorney, which will allow them to make financial decisions on behalf of their spouse if deployed or unable to access accounts. Finances are a very important thing to talk about before any deployment. Be sure to share account numbers, passwords and due dates.

For those couples who may face or are facing a deployment, check out Smart Military Money’s financial checklist for the soon-to-be-deployed

Tackling Debt

Debt is a problem for marriage, no matter who it originates with, since both credit scores can play into major purchases. The first step is disclosing the amount of debt each other is facing as well as the interest rates.

Set goals together for when you want each loan paid off and evaluate the plan with each other as months go by. Some couples choose to combine debts by paying the most toward the principal with the highest interest rate. That way, it can be paid off first and you two can tackle the less burdensome debts.

Stash Cash

A good habit for couples to get into is contributing extra cash or dedicating a certain percentage of pay to a savings account. It’s recommended that couples have three to six times their monthly expenses in savings for any emergencies or unexpected loss of income. Newlyweds probably don’t have such a stash on hand after a wedding, honeymoon and home purchase, but with commitment and patience, they can get there.

Photo thanks to RambergMediaImages and Brad_Chaffee via Flickr Creative Commons

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