My husband and I were married on April 16, 2014, in Los Angeles, California, where same-sex marriage was legal. A little over one year later, on June 26, 2015, the U.S. Supreme Court struck down all state bans on same-sex marriage, legalized it in all fifty states, and required states to honor out-of-state same-sex marriage licenses.
We have been together since November 2001 and have gone through major career changes, cross country moves, the death of parents and other major life changes that are universal, but provided some unique challenges for us, seeing that we had been together for so long, but we're now legally married.
In Jessica's video, "How Do We Merge Our Finances?", she offers some great tips on approach this. Here is my story on how we as a couple worked through this and planned our financial futures. What we did may not specifically work for you, but these things worked for us.
We had many, many conversations over the years about finances and money, starting when we initially moved in together back in 2003. At that point our finances were separate, but we came up with a plan as to how we handled the monthly bills and expenses.
Things started getting "real" when I received an offer to buy my company (I ran a small entertainment media company that published three websites) and part of that offer was to join the organization that was purchasing my company and moving from Chicago to Los Angeles. So we talked about and looked at every aspect of our finances (from debt to retirement to a 2000 mile move to the cost of living in California) and how the purchase and move would impact our finances and lives.
I ended up accepting the offer, my husband quit his job in Chicago and we made the move to Los Angeles. So we laid out a plan to pay off our credit card debt, fully fund our emergency fund (everyone should have one), investment strategy, my husband (partner at that time) went back to school and we officially decided it was time to merge our finances. We also hired a financial planner who helped us navigate what to do with this large chunk of cash that we received once I sold my company.
At first, it was definitely a challenge after merging our finances, especially since we were living in a new city that had a higher cost of living than we were used to. So after about six months, we realized that we needed to sit down and go through our monthly expenses and income and come up with a budget and monitoring system. We already had a joint checking account and two joint savings accounts (one for our emergency fund and one for short term savings - like for travel and unexpected expenses), but we ended up opening two additional individual checking accounts.
So we use the joint checking account for all our monthly joint bills (utilities, internet, auto loan, rent) and joint expenses (groceries, household expenses, pet care, gas, joint entertainment, medical) which were baked into our budget. With the two individual checking accounts that we opened (one of each of us), we deposited a set amount each payday into each account (those amounts were baked into our budget as well) and used that for discretionary spending.
As of the discretionary spending, that includes haircuts, if you buy lunch during the day at work, if you go out with a friend for drinks or dinner, clothing, subscriptions, if you take an Uber to meet a friend — those sort of things. It took a few months of tracking spending to come up with set figures for those spending amounts.
We reevaluate our budgets once a year (and teak them throughout the year) because things change.
In 2014, we decided to take the plunge and get married (California as a state legalized same-sex marriage on June 28, 2013), but once same-sex marriage was legalized in the United States in 2015, that's when we had to make a few other changes and decisions. We were able to file taxes jointly which was new, so we had to look at our paycheck deductions and alter those accordingly.
We had wills in place already but did not have any life insurance outside of what our employers provided. So we invested in life insurance policies for each of us. We also took a look at our retirement strategy more as a whole than as individuals.
In late 2017 my husband was offered a job in Chicago, and we decided to make the trek back to Illinois. With all the planning and budgeting that we had done, we determined pretty quickly that this was doable.
Finances are a big deal, complicated and constantly evolving so getting advice from someone who specializes in financial planning is key. One thing that I love about working at Merino Wealth is that while there are common threads in financial management; every situation is diverse and our clientele is diverse. We work with our clients to help guide them through all the changes that occur in their lives because, with every change, there is a financial consequence.
Michael Prieve is not a registered representatives of The Investment Center, Inc. Jessica Merino is a registered representative of The Investment Center, Inc. and can answer any questions you may have.
Merino Wealth is not affiliated with The Investment Center, Inc.
The views expressed today are my own and do not necessarily represent the views of my broker-dealer, The Investment Center, Inc. or my Registered Investment Advisor, IC Advisory Services, Inc. The information contained is derived from sources believed to be accurate. However we do not guarantee its accuracy. The information contained is for general use and it is not intended to cover all aspects of a particular matter. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any securities. The information contained is not appropriate, by itself, to guide investment decisions.
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