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Talking about money can be awkward, but it's an important step in every relationship. Whether you're in a long-term relationship, newly engaged, or even contemplating a marriage or domestic partnership, there are many financial topics worth discussing with your partner. And the sooner you start talking about it, the better!
From knowing if and when is the right time to open a joint checking account to family planning for the future, we've curated the most important things to know for young LGBTQ families. Choosing the right checking account is an important step. Find the best checking account for you from U.S. Bank.
Should we open a joint bank account?
Just because you share your life, doesn't mean you have to share your money. Every couple is different, but before you can decide, you need to have an open and honest discussion. Do you and your partner only split the costs for drinks and food? Maybe a joint account isn't necessary. Larger, ongoing expenses such as rent or a mortgage might warrant having a joint checking or savings account. Many couples open joint bank accounts to streamline their finances and work toward mutual goals.
Get more information on opening a joint account with your partner here: https://www.usbank.com/lgbt/insights/joint-bank-account-right-for-you-and-your-partner.html
Should I tell my partner about my debt?
You're not alone in worrying about this. Over 80% of Americans have some kind of debt. While the most common type of debt is a mortgage, a 2013 Federal Reserve Survey of Consumer Finances found that 38.1 percent of Americans have credit card debt averaging $5,700. For every relationship, it's important to have an open discussion about finances. Talk about your debt and discuss the different types you might have: mortgages and home equity loans, credit card debt, student loan debt, auto loans or other loans.
Once it's out in the open air, you can discuss how or when you plan to pay off the debt -- and create a sensible financial plan for the future.
How do we budget for a wedding?
A wedding can be a great celebration of your love, but it can also be a drain on a tight budget. How much you spend getting married is entirely up to you. There are endless choices and ways to publicly declare and define your relationship, so keep an open dialogue with your partner from the beginning to make sure you both get what you want.
Before planning for a wedding, you need to talk money. Determine which wedding events you're going to host (such as showers, parties, a honeymoon, etc), how many people you're going to invite, and then always -- always -- budget an extra 10% for the unexpected.
Get more tips for budgeting for LGBTQ weddings on the U.S. Bank website here.
How do we prepare financially for buying a home together?
Financially preparing for a first home might seem overwhelming. However, there are steps you can take to help make your dream of home ownership a reality. It's important to weigh the decision carefully with some initial planning. Have a conversation about your goals and responsibilities with your partner before, and you should also know both yours and their credit score. Start saving as soon as you know homeownership is a path you want to go down. Buying a home can be an expensive process, and it's important to save for both the down payment and the closing costs. Calculate your monthly mortgage costs to make sure you can afford it. Review today's mortgage rates and calculate your monthly payment at USBank.com.
How do we file taxes as a married couple?
One of the first things you'll have to determine as a newly married couple, is whether you'll file your taxes "married filing separately" or "married filing jointly." There are many factors that affect which is the most cost-efficient option for you. If your income isn't changing dramatically, consider filling out mock 1040 tax return forms to see which scenario is best for the both of you or talk with an advisor on what's best for you and your partner.
What is estate planning? And how do we prepare?
Estate planning is most commonly associated with inheritance -- especially for children. But even if you don't have or plan to have children, estate planning is still essential for modern families and couples. It's important to define the following for whatever might come:
- Power of Attorney
- Health Care Directive (or living will)
- Beneficiary designation
- Philanthropy
Prepare your estate plan by working with an attorney, and then share the documents with trusted friends or family members, and store originals in a safe box. Start early with a plan and adjust it as your life changes.
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Planning for your financial future might seem overwhelming at first, but if you take it one step at a time, it's possible to achieve your goals.
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U.S. Bank, U.S. Bancorp Investments and their representatives do not provide tax or legal advice. Your tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation.
