My hubby and I got married in August, and it took us a couple of months to figure out our financial situation. Consolidating our finances and learning to trust each other was harder than it looked. I still had my bank accounts open five months into our marriage! The money in the bank accounts comprised of small savings that I was going to transfer, but I started dipping into it without accounting it for in the budget. They were not big dips, only $10-$20 at the time. Except then came Christmas. Splitting gift money on two accounts made it seem like we weren’t spending that much money until I added all the receipts in January. We only had budgeted about $400, but actually spent close to $800-$900. When I saw this in January, I realized that we were better off consolidating our finances. We have transferred most of my savings to our savings. I only have one or two more transactions before it’s complete. It’s nice having it all together, and seeing our net worth.
David Bach in Smart Couples Finish Rich says “letting your financial life just happen to you is like getting on an airplane with no clue where it’s heading.” He also states that there are three fundamental truths of financial planning. First, you can’t plan your finances if you don’t know where your starting point. Second, you can’t plan your finances if you don’t where you want to end up. Third, in order to stay on track form your starting point to your destination, you have to monitor your progress.
Consolidating our finances was the first step in knowing where we stand. You might be single, but these truths also apply to your financial planning. Don’t let your financial life slip away from you. You don’t want to be 50, and realize you are nowhere close to retirement.
Do you know where you stand financially? If you are married, when did you start consolidating your finances?