“Hi Money Minder,”
Hey, I’m getting hitched soon and need some tips on merging finances with my partner and setting aligned goals. Want to make sure we’re on the right track. So, here’s the lowdown: we’re both in our mid-thirties and living in MN. My fiancé, after moving in with me, diligently worked on clearing her debts which were around $35k. She took a pay cut, now earning $97k, but she’s happy with her current job.
We split household expenses 50/50, which has been working out well. I cover about 60-70% of other expenses. My main aim is to be debt-free (except for the mortgage) in 2-3 years and retire by 60. Our shared goals include getting a bigger house, a new car for her in 2-5 years, and starting a family.
I’m thinking of extending my auto loan till 6/2026 and keeping my student loans because of filing jointly and being on an IDR plan till 2028 for her grad loans. We also plan to clear her car and private student loan ASAP. After that, I suggest she increase her 457 contribution to $500+ per paycheck to cut down taxable income.
We’ll have a my money, your money, our money setup, but I’m open to hearing what others have done successfully. A bit about me: I’m self-employed, pulling in around $100k gross and $70k net. I max out my SEP every year, Roth IRA, HSA, and save/invest in a brokerage account as well.
For assets and liabilities, here’s the breakdown…
Any advice on how we can manage our finances better and achieve our goals would be greatly appreciated. Thanks for the help, Money Minder!
Farewell, Money Minder,
Response from THE MONEY MINDER:
Hello There,
Congratulations on your upcoming wedding! It’s great that you and your fiancé are taking the time to align your financial goals and share expenses. It sounds like you both have a good grip on your current financial situation and have a clear vision for the future.
In terms of sharing expenses, it’s understandable that you’ve been 50/50 on household expenses while you’ve been helping your fiancé get back on her feet financially. Since you’re self-employed with variable income, it might be practical to continue with this arrangement for now to ensure stability. However, as her financial situation improves, gradually transitioning to a more equitable split might be beneficial for both of you.
Regarding your fiancé’s debt repayment plan, it’s great that you have a clear strategy in place. Prioritizing high-interest debts like her private student loans and auto loan is a wise move. Once those are paid off, focusing on the federal student loans to take advantage of the PSLF program could be a good long-term strategy.
Your plan to increase her 457 contribution to reduce taxable income is a smart way to save for retirement and lower your overall tax liability. Additionally, continuing to invest in both your retirement accounts and emergency fund will set you up well for the future.
As for the my money, your money, our money arrangement, every couple is unique in how they handle finances. It’s essential to have open and honest communication about your financial expectations, goals, and responsibilities. Finding a system that works for both of you while maintaining financial transparency can help build trust and a solid financial foundation for your future together.
In summary, it seems like you both have a good grasp of your financial situation and a clear path forward. Keep communicating openly about your finances, continue to prioritize debt repayment and saving for retirement, and adjust your financial arrangements as needed based on your evolving circumstances. Congratulations on taking proactive steps to align your financial goals, and best wishes for a bright financial future together!
Farewell from THE MONEY MINDER
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