This is what it's like when world collide. Combining finances after the I DO!!!!

This year we will be hitting our 10 year anniversary.  It has been great and I have experienced things and gone places I never would of alone.   We agree on a lot and we on even more.  Our differences makes us a good team balancing each other out.

I lucked out with my wife; we are both college educated in a hot field that was just taking off.  We both graduated college debt free.  Both doing it different ways.  She did it with scholarships and parents paying for her schooling while I it through tuition reimbursement and working almost full time through school.  I graduated a couple of years before her, so I had significantly more money saved then she did.

Before I get into combining finances it is important to know our backgrounds.  I grew up in the Mid-West from a middle class family and my wife grew up in Los Angeles area from a middle class family. Now unless you've lived in both places you probably think they can't be too different.  I'll tell you what.  We could have grown up in two different countries and mad closer family spending habits.

If this comes across like I'm anti-west cost or mid-west is this best I don't mean too.

The Mid-West philosophy is to not pay someone to do something you can do yourself.

The West Coast philosophy is my time is valuable and if I can pay someone to free up my time I will.

These are generalized from what I've seen or experienced.

Mid-West	West Coast
4 bedroom house 2 cars (domestic or Toyota/Honda) fishing boat	4 bedroom house Pool 2-3 cars (BMW/Luxury or Prius) house keeper 2-3 times a week utility vehicle(boat, motorcycle, 4 wheeler)

As you can see similar backgrounds, but differently different.  We both have worked growing up I started at 15 throughout school and she held jobs in the summer throughout high school and college. 

She was never thought about personal finance or investing except she knew credit card debt was bad. I on the other hand had classes in mid-school math about balancing checkbooks and on most Sundays growing up on drives with my family my dad was listening to some type of investing radio shows on the radio. 

I started investing while I was in college.  I was dumb and investing in stocks, but took it slow to learn the ropes.  While my wife didn't invest until she started her first job out of college and put money into a 401k. 

Once you finally say I DO now the real works begins.  You start moving in together. This can be figuratively or literally.  Even if you live together before the wedding now it really it "our stuff" not yours or her stuff.  Get used to; from now on everything you buy is ours and you can't just buy something or make big financial decision without having a talk with your spouse. 

There are four phases to combining finances as a couple.

• First is the dating phase.  
• Second is the engagement phase
• Third is the first married phase
• Fourth is the big purchase/kid phase

First phase is simple it's your money and it's her money. You may split meals or dates, but that's about it. Usually at this point you don't know how much money or debt they have all it's all fun and games.

Second phase is a tough one.  One day, one of you will get the courage to ask the other to spend the rest of your lives together.  At this point you both have verbally committed to make a future with each other.  We have to assume at this point you have talked about marriage, kids, and finances.  If not GET TO IT NOW.  For me at his point in time my wife and I had not really talked about finances very much.  I believe we both assumed we had about the same amount of saving and debt. Our only debt being the new cars we both bough about the same time we started dating.   After the big question we did start taking about where we were going to live and our finances.  The thing was we lived in different states and both have lived in the same place almost our entire lives.  After creating a Venn diagram to determine which was best for us I moved to the California. Another thing I realized I had a significant amount of money saved compared to her.   This was mostly behave I started working a couple of years before her and I invested in stock such as Apple, Visa (IPO), and Berkshire Hathaway. Pure luck I picked these stocks. 

Third phase the married part.  Now your married and blown all you’re saving on the wedding and honeymoon.  In my case since I got married near her family we ended up having a second reception by my family complete out of our pocket.  There went all my stock money :( sad times.  This is the hard part. We had a big decision to make about how we are going to manage our money. We both worked and have two different banks.  I needed to change banks due to my bank didn't operate in California. I created a checking account at the same bank as hers and we created another checking about to put as a joint to pay bills.  

Our bills at this time:

• Apartment
• Utilities
• Her Car
• My Car
• Insurance for cars
• Insurance for Apartment

Simple life and we were saving a good amount I would say we were around a 50% savings rate.

This joint account worked for a while; until our bank change policy and needed direct deposits into checking account once every 45 days or they charged a fee.  The issue was we created joint checking both our checks went into then our two personal account we transferred from the joints as our allowance.  This was suck a pain in the butt to change we just cancelled the separate accounts and from then one we were one.  

This made life much easier.  I've been tracking spending since high-school so having me take over made scene.  I created an online savings account to keep our extra money.  This is important to do they proved a higher than average % APY.  They have been around 2% for years which blow most brick and mortar banks out of the water.  The heavy hitters in this area are ALLY, Discover, and FNBO Direct.  At this point we talked about investing.  She did not like investing because she thought it was just gambling.  I showed her my track record of success and now really it was gambling if you buy and hold.   Let just say I eventually earned her confidence in this year, but it took many years.  

Fourth stage is the big expense or kids.  If you are anything like me you did it the "smart" way and decided to buy a house within two month of having twins.  Did I say smart? Let take a step back on this.  We lived in California and looked around at house prices and just laughed.  No way could we afford anything anywhere close to our work.  So we decided to pack up our things and move to Colorado.  This ended up bring a great chose. Life was much more affordable and our job gave up a pay increase for move to Colorado.  WIN WIN. At this point we have been saving for a house for a few years with a goal to have 25% saved before we bought a house.  The best-laid plans of mice and men often go awry. No matter how carefully a project is planned, something may still go wrong with it - Robert Burns. Very true.  After some difficultly and doctor visits one thing led to another and we got pregnant "Whoopee"!!!! With twin..................Crap now what.  Ha well after the shock wore off we were very excited, but had no idea how much doctor visits we were in store for.  So about 4 months into the pregnancy we were in a hurry to buy a home.  This was no easy task. To give you an idea on a normal pregnancy 4 month the mom to be is barely showing.  Random people are asking you "wow your about to pop when are you due”. All you can do is laugh and smile.  It took us 2 month to find the house we wanted and honestly it was significantly more then we wanted to pay, but we were desperate.  Desperate decisions led to bad decisions.  

We had a chose to make either put 20% down and totally drain our saving or put 15% down and take out a HELOC for the other 5% and keep the remaining in reserve for the birth.  We chose the HELOC route mostly because the interest rate on the HELOC was the exact same as the mortgage and it was fixed for 18 months.  Knowing we could pay it off by then it was an easy choice.  

Now having twins are expensive, because they are high risk.  You will need to save, save, and save for these guys.  At this point our wife will not care about finance it will be up to you to make sure everything goes well.

Married is scary, hard, challenging, wonderful, comforting all rolled up into one.  There is no right or wrong way to manger your finances together, but you need to talk about it.  I have found since we both know what is going on with our finances it has made the talks easier when I wanted to go down the pay of FI. 

Just remember it isn't your money. It isn't her money. It is and will always be our money. It doesn't matter how it comes in once you say I DO that's it everything else is OURS from then on.  

Have fun and enjoy.