Separate bank accounts will help protect newlyweds

DEAR BRUCE >> I will be getting married in the next year to a wonderful man. I trust him completely, but in the past he had major credit card debt. He has since cleaned it up, but I am wondering if we should have separate bank accounts when we marry? — Gene DEAR GENE>> Congratulations. I see no reason to distrust him, but on the other side of that, since he had major credit debt in the past, he may possibly do it again. Absolutely you should have separate accounts — as a matter of fact, separate financial lives altogether. You should agree on who’s going to pay what on the rent, household expenses, etc. Make a budget and, of course, if there are more earnings on one side, then that individual will take more responsibility.

It’s not a question of trusting him, but with his track record, it’s wise to protect him and you.

••• DEAR BRUCE >> As we gear up for retirement in a few years, we feel the need to start living on a more restricted budget. My commission-based income is more than enough to live on, and 10 percent goes into a 401(k). The issue has been too much miscellaneous spending. Average monthly take-home is at $5,000 versus about $3,600 in fixed expenses, which means our savings account should have a balance $15,000. Needless to say, it’s nowhere near.

What do you think of this strategy: Going forward, we are having all pay directly deposited to savings and plan to transfer enough to checking to begin each month with $4,000. I realize it is only a temporary fix, but it will hopefully keep us from spending too much and should help us prepare for the time when income will truly be fixed. — J.J. DEAR J.J. >> I think paying yourself first is the best way to go, but don’t ask yourself to pay so much that you put a strain on yourself and then decide to skip a month here and there. If you have the numbers as stated, I would think that you should be able to save about $750 a month, and that’s not an unreasonable amount to put aside. If you choose to save more, that’s fine, too.

••• DEARREADERS>> I misspoke in response to an earlier question about whether bank and credit union accounts are covered to the same degree by the FDIC. I should have said that, at both institutions, a single person walking in with one account is covered up to at least $250,000, but banks are covered by the FDIC (Federal Deposit Insurance Corporation) and credit unions are covered by the National Credit Union Administration (NCUA). There are ways to increase that amount, and you can check with your covered credit union or bank to find out how. I am sorry for the confusion; I should have been more explicit about the names of the two covering agencies.