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How Engagement Changed Our Finances

Engagement is that strange, twilight period where you are still single in the eyes of the law, but that you have made promises to each other to become something more – a legally sanctioned partnership with all the rights and obligations accorded to you by the state. I am not sure how much impact an engagement has on most couples’ finances, but even though CB and I won’t be getting married until next June, the act of getting engaged, I feel, have already changed the way we look at our finances:

  • I usually carry a small life insurance policy provided through my employer. In years past, I have always designated my mom as my beneficiary. During the most recent open enrollment, however, I put down CB’s name. I don’t know when CB started putting my name down as his beneficiary, but that apparently happened before my enrollment period.
  • CB has a few thousand dollars in student loans from undergraduate years. I feel much more motivated now to figure out how we can pay off this debt before we go to graduate school, even though it’s not technically my loan. I know that whatever debt we have, even though they are individual loans, will affect our financial resources as a couple.
  • We have stopped keeping very close track of who pays for what or how proportionally split our expenditures are. If I feel that he has been picking up a lot of the tabs lately, I’ll pay for our flights for a get away or the next Costco run.
  • I’ve never thought I’d want a 100% combined finances set-up, but I am beginning to change my mind. The sense of partnership – of being in this together, with someone whom you do not have to calculate with or account for – is very appealing indeed. So I suppose being engaged, and really appreciating the feeling of shared resources, shared opportunities, shared goals makes me seriously think about combining finances once we are married.

Has engagement changed (or do you think it will change) your finances and attitudes toward shared finances?

  • Margo - Regarding his loans – think about this one before you do it. Loans from undergrad might be 3-4%, but loans for grad will be 5-6.8-7.9% (Perkins, Stafford & Grad Plus)…your few thousand dollars might be better utilized paying more out of pocket for grad school than paying the undergrad loans sooner. ReplyCancel

    • Well Heeled Blog - Good point! His interest rate is 5%, which I think would be lower than any graduate loan interest rate we can get. ReplyCancel

  • Jeff Sustainlifeblog - I've got no idea how it would change my finaces. The girl I'd like to get engaged to (I live with her) is pretty good with her finances and we've talked about things before, but I'm not sure what would end up happening in the event of an engagement. Hopefully not much would changes except for saving more for a home, but who knows. ReplyCancel

    • Well Heeled Blog - Dual income! (or in my case, dual-broke-grad-student), but you know. :) Two people working towards the same goal = goal gets done faster, right, right? ReplyCancel

  • My money, my life - I'm in a long term relationship and am not engaged. I believe that engagement/marriage will change my finances and attitudes towards it, to a certain extent. I think that like you, I'd feel less inclined to keep close track of who spent on this and that. I may also open up a joint account where my partner and we contribute, proportionate to our relative income, towards our shared expenses (housing, insurance, utilities etc). But knowing myself, I will probably never be fully comfortable with 100% combined finances. It's really important for me to feel financially independnet, and I probably would not be able to fully trust that responsibility onto someone else but myself. ReplyCancel

  • Harri @TotallyMoney - I live with my boyfriend and I find this interim stage odd. I'd like to go halves on purchases for the house, for example, but we're cautious that if things don't work out, fighting over a kitchen chair isn't exactly desirable. Truth be told, he's also better at organising his finances than I am. He has made more shrewd investments, and I'd like to learn from him in a more meaningful way.

    It's strange how you can see your financial outlooks and attitudes morphing the longer you're in a relationship with someone. That said I think engagement and marriage provides a stable base for making big money decisions together. ReplyCancel

  • First Gen American - Ours didn't change much out of laziness. I've been wanting to change that recently but we've been together 14 years. Talk about procrastination. ReplyCancel

    • Well Heeled Blog - I have a feeling that might be us. Getting married in a community property state means that everything will be split down the middle anyway. ReplyCancel

  • TLC - My now husband and I moved into together while we were dating. I was in college (working maybe 15 hours/week), he was working full-time. We split the bills proportionately based on pay, so I obviously paid a lot less than he did. Once we got married, we combined everything.. and I wouldn't have it any other way. My money is his money & visa versa. We work to support & take care of each other. ReplyCancel

  • Brian - I live with my girlfriend and this is soemthing we discuss regularly lately. In the beginning we were always buying items as hers or mine, so if we did split, it would be easier. But lately its more right down the middle. I am really not looking forward to her debt, right down the middle. ReplyCancel

  • Ann Eddy - OK – Get the book "If you had a Million Dollars" Author James SAywell. Sit down together…. have fun with it…. get inside your sigmificant other's mind.

    QUestions like – 'If you were to name the least amount of money you could live on and still be happy?????' Will lead to answers you want to know about your loved one. ReplyCancel

  • Kim - We had gotten much more relaxed about figuring out how to split things, who owes whom and such, even before we got engaged, but now the worrying is just off the table completely. If I'm running low on cash, he'll transfer money over, and vice versa. At some point, I think we'll just combine completely, though I'm thinking about keeping some sort of separate "fun" spending accounts for gifts and personal things (shopping, hockey, etc). That way, nobody has to feel like, "hey, you're spending OUR money on something I don't care about". Then again, does it really matter if it's all ours anyway? Oh, the questions… ReplyCancel

  • ashemischief - Wow– hot topic lately! Grace at Money Smart Fashion wrote about her and her Super Saving Fiance combing finances.

    When the Beau moved in, we combined right away. Even though we're not engaged yet, we're… engaged to be engaged? We know we're in it for life. Even though I came in to the relationship with 14,000+ in cc debt, and both of us have between 40-80K in student loans, we don't hold that against each other. We combined our finances, because our parents had and we knew that was what was "right." The hardest part is figuring out spending money, because sometimes we both feel like since I make more, I should get to spend more… but then he gets resentful if he doesn't get his toys, or he'll tell me I'm buying too much, and I get resentful I don't get things when I work so hard.

    So for us… well, engagement would just have one less step out of the way! We're doing well on sharing our finances overall, and I love the shared feeling of "We can do this together," when it comes to making our financial goals a reality. ReplyCancel

  • Delaying Merging Finances | Well Heeled Blog - [...] many ways, finances after marriage will look exactly the same as finances before marriage, especially when it comes to the day-to-day things. We will eventually merge our money so [...]ReplyCancel

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