Getting married can be one of the happiest moments in a person’s life. I know this firsthand as my wedding was just a few months ago and the word incredible would be an understatement. But to go along with all the great times, there are also important, sometimes difficult changes that two individuals must make when they get married. As a Wealth Advisor, I’ve seen the tension and distrust that money can bring if couples aren’t on the same page. I want to equip you and your significant other with questions and considerations to set you up for a long, happy life together.
Communication is key! Financial planning for couples isn’t about ratios and formulas; it’s about being open and honest with your spouse. Talking about income, debt, and savings can cause some people fear or stress. That’s normal as these can be sensitive topics that we don’t often speak to others about. But remember that this is the person you love and have committed to spending the rest of your life with. These conversations can save you from potential trouble down the road.
The first thing to think about is what to do with your bank accounts. There are really three options.
- Combine everything into a joint account so that every dollar is shared.
- Have a joint account for shared expenses and savings, but also retain your individual checking accounts for gifts to each other and purchases for yourself.
- Keep everything separate. This option does work for some people, but I generally recommend going with option 1 or 2 to achieve your joint goals.
Next, consider the goals you share, such as retirement, buying a house, and starting a family. These are some of the big decisions and goals you’ll work toward when you’re married. You want to make sure you communicate how you’ll both save and spend money. Here are some additional considerations:
- Will you put money away toward retirement, college savings, a house down payment, etc.?
- If one spouse is more risk averse, how will you handle selecting investments?
- If one spouse has a lot of debt, will you pay it jointly or have just the individual work toward it?
- How will you handle filing your taxes?
I hope this article can help get the financial aspects of your marriage in great shape. Remember, the most important piece is that you and your spouse communicate openly and consistently with each other. If these discussions still seem too uncomfortable, this is also a perfect opportunity to speak with a Wealth Advisor. We can serve as an objective third party who is skilled at asking the difficult questions. Please feel free to reach out. I’m always happy to help!
For more advice, check out this article about how to prioritize your savings.