Finances After Marriage

Most Americans–80% plus–get married at some point in their lives. And for those who do, it’s likely both a big decision and a huge shift in their way of living. Amidst the joy of a pending or established marriage, it’s important to remember that your new union has implications for your finances as well. One of the key points of stress and argument in any marriage is money, and by understanding the role finances play in marriage you can avoid a great many problems later on. Finances for marriage need not be daunting, but there are a few things you should bear in mind.

As cold-hearted as it might sound, prior to getting married every couple should have a detailed and brutally honest conversation about their respective financial situations. This is time for complete transparency and full disclosure; income, assets, debt, credit are all subjects that must be discussed in detail so that all involved know what they’re getting into and what the financial effects of their marriage will be. It may help to involve a financial advisor, couples counselor, or both in this process as many of the issues raised may benefit from the professional insight.

Building on that initial conversation, every marriage should include an ongoing discussion of shared financial goals. These will naturally vary from couple to couple, but an open and continuous dialog about them is another must-have in a successful marriage. Do you want early retirement? A robust investment portfolio? Will, there be children someday, and if so what provisions are you making for their futures? Do you want to buy a house sooner or later? Again, your goals are based on your own needs, desires, and circumstances, but you should at least have a shared vision and direction clearly understood by both parties.

Couples planning on getting married should pair these discussions with a long talk about their wedding. On average, a wedding in the US costs between $25,000 and $33,000. This is a huge expense, even if the couples’ parents are paying for it. Reaching an agreement early on regarding your wedding spending as part of your overall financial goals is a good idea. Nothing ruins the magic of a perfect wedding like ongoing debt or lost financial opportunity.

It may sound obvious, but at all points, in your marriage, a budget is a good idea. Deciding how much of your money goes toward what goal is an absolute must for financial success under any circumstances, but especially when you’ve joined your life to another person. Likewise, it’s never too soon to start planning for retirement, and marriage does carry implications for most modes of retirement planning. This is another point at which the help of a financial professional may prove useful. An advisor with some expertise in retirement and estate planning can make the process easier and more efficient.

We’ll end on a small and mundane note: should a married couple have shared bank accounts? There are advantages to shared accounts: it makes it easy to track spending, keeps things transparent, and may make it easier for one half of the couple to take control should the other become incapacitated for whatever reason. Separate accounts maintain a feeling of independence and may allow for greater flexibility in both spending and planning. Ultimately it’s up to the couple what to do: shared accounts, separate accounts, or a combination thereof.

Successful financial planning is part of a happy marriage and one that should not be overlooked. Open honesty with your partner, careful planning, and solid financial advice are three things you’ll need in order to make both your marriage and your finances as successful as they can be.