Getting married is a big commitment. You agree to love, honor, and cherish your spouse for better or worse, richer or poorer — but that doesn’t mean you have to commit to every financial decision your spouse has ever made. You and your future spouse may have very different financial opinions, habits, and backgrounds. But with the right talking points and a willingness to discuss matters of money, you and your partner can find common financial ground and avoid many of the pitfalls that tend to trap married couples.
Discussing Money Before Marriage
Talking about money might be the furthest thing from your mind when you’re dating and it might not even come up when discussing plans to get married. But having a healthy heart-to-heart about finances can bring you closer together as a couple. It can also help to build wealth and meet your financial goals as a couple while avoiding financial strain on your relationship down the road.
Even though you and your spouse-to-be likely have similar interests, you also likely have different expectations about money. You might be a saver and your spouse might love to spend money. You might try to avoid debt at all costs and your spouse may have multiple costly loan payments. Whatever your financial situation, taking time to talk about money can help you to become more financially compatible—an important part of any relationship.
How to Talk About Finances Before Marriage
Discussing money before marriage is important. Every couple should disclose financial obligations and discuss their financial hopes and dreams together. But that doesn’t make starting the conversation any less difficult. These types of conversations can be awkward and sometimes sensitive. Consider the following questions to get the financial conversation started.
Do We Have Debt?
Debt makes the financial world go ‘round. It can help you and your spouse build and rebuild credit and afford the necessities and niceties of life. But for some people, debt can be a deal-breaker, especially in excess amounts. No matter your feelings about finances, surprising your spouse with debt payments and obligations is no one’s idea of a good wedding gift. Ask your partner the following questions about debt before the big day.
- How much debt do you have? When it comes to debt, get right to the point. Ask your partner about how much debt they may have and talk about your combined debt and plans to pay off debt to maximize your money.
- Who are your lenders? Talk about where your debt comes from — credit cards, car payments, house payments, etc. — and who your lenders are. Putting everything on the metaphorical money table contributes to an open and honest discussion about finances and can help you and your partner set realistic goals and expectations for paying down debt.
- When was the last time you checked your credit score? Your partner’s credit score can affect your future ability to borrow money if you apply for loans together. Checking your credit scores can help you stay on top of changes and ensure that your score and your partner’s score are always heading in the right direction. Ask how often your partner checks their score and consider checking scores together as part of a larger discussion about debt.
- How important is paying off debt to you? Debt eventually needs to be paid back. Failing to do so can have serious financial consequences for you and your spouse. Talk to your partner about the importance of paying off debt and come up with a plan to make your debt payments on time, every time.
What Do We Do About Wage Differences?
When you’re just starting out, it’s easy to set high-income expectations — the millions might seem like only a few years away. While being optimistic about income can be a good thing, it’s also important to set realistic expectations for you and your spouse about how much money you will need to provide for your newly formed family.
- What are your income expectations? Ask your partner about their career goals and try to gauge their income expectations. You might value a modest, reliable income. Your spouse might think differently. Discrepancies in income expectations can lead to relationship problems. Have an open, honest discussion about your money-making goals and try to find common financial ground.
- Will one of us stay home while the other works? Depending on your income expectations, you and your spouse may need to work to make ends meet. At the same time, having two income earners isn’t always conducive to every family goal. Discuss whether you both want to work and how you can maintain your expected standard of living based on your combined income.
What Are Our Financial Goals?
Successful financial relationships don’t often happen by accident. They take time and proper planning. Before marriage, talk to your partner about their financial hopes and dreams and set achievable goals together to make them a reality.
- Where do you see us in 3-5 years? Preparing for marriage isn’t a job interview, but that doesn’t mean you can’t get a feel for your partner’s future financial plans. Ask each other when you want to buy a house, what kinds of cars you can afford, and how often you’ll need to make major purchases. Whatever your expectations, setting and sticking with small goals now can make your financial dreams a reality.
- What financial goals do you want to prioritize right now and how can we reach our joint financial goals? Talking about future financial plans can be fun (and important), but taking care of the here and now can help you reach your financial goals together. If you have debt, consider discussing paying it down so you can put your money into other investments. If you need to start saving up for a home or a car, find ways to save and plan today. Evaluate your current income and obligations and prioritize present financial responsibilities that will allow you to work toward tomorrow’s plans.
Should We Combine Finances?
It’s not always a given that married couples merge their money. Some couples decide to keep separate accounts, credit cards, and even own assets individually. Whatever you decide to do, make sure both you and your spouse are on board.
- Should we gradually combine finances? If you decide to combine your income and accounts, talk about how and when you want to do that. You can add co-account holders and combine your income all at once, or you can gradually merge your money and share financial responsibilities over time.
- Should we maintain separate accounts and income streams? If you elect to maintain separate income and accounts, have a plan in place to ensure that every obligation is covered. Talk about how you will own and pay for individual and shared assets and what happens if or when your spouse needs help with money or can’t meet a financial obligation.
What’s the Best Way to Create a Budget?
Living by a budget is the best way for you and your spouse to reach your shared financial goals. But like your relationship, it takes real commitment. Take time to discuss the best way to budget your income and manage your expenses, and be open to the fact that your financial situation and budget will change many times throughout your lives.
- What will our budget look like? What’s the best way to manage your money? Do you want to keep track of every receipt and itemize every expense? Do you want to manage your money through an online budgeting tool? Talk about the best way to budget for your lifestyle to help you stay on top of your expenses.
- What are our short and long-term goals? A budget can help you avoid excess debt and meet your immediate financial obligations. But the broader purpose of a budget is to help you stay on track with your short- and long-term goals. Make your future financial plans a big part of your budget, and work together to save for things like a home, your retirement, future vacations, and other expenses.
- What are our wants and needs? This is a great time to have a conversation about wants versus needs. As you budget your money, keep your financial priorities in line with your income. Contribute to your savings and necessities first. Then, consider planning for purchases that allow you to enjoy life together.
How Should We Invest Our Money?
When it comes to marriage and money, you should always look at the long view. Your focus should be on building wealth and meeting your long-term financial goals. You’re in this for the long haul and you need to make your money last.
- Do you have a 401K? Ask your spouse about any current investments they may have. If your spouse’s employer offers a 401K, talk about opening an account and saving some money every month, especially if the employer will match contributions. Even if you’re just beginning your lives together, it’s never too early to start saving for retirement.
- How will you invest to build wealth? Talk about your investment goals together. Will you invest in the stock market or real estate? When is the right time to open an individual retirement account and how much money should you invest monthly? Having a discussion about investing before you get married can help you kickstart your financial goals together.
Should We Consider Estate Planning and Insurance?
What will happen if you or your spouse are unable to earn an income? It’s not fun to think about, especially when you’re just starting out, but it’s important to have a contingency plan to ensure that you can continue to meet your financial obligations and live comfortably.
- Should we create a will? Depending on the succession laws in your state and your personal financial situation, you may want to consider creating a will to ensure that your personal property and belongings pass to your surviving spouse. Either way, it’s important to talk about what will happen to your money and property after death.
- Should we look into life and health insurance? Have a discussion with your partner about how you (or your spouse) will pay for your home, car, and other ongoing financial responsibilities, if one of you becomes disabled or dies. Insurance might give you peace of mind, especially during a time of life when you have a lot of obligations and not a lot of income.
Summary: How to Talk About Finances Before Marriage
Before you tie the knot, tie up this loose end and have the all-important money talk with your partner. These sometimes-uneasy conversations are a great way to get on the same financial page with your spouse and set the stage to budget, build wealth, and work toward your shared financial goals.