Financial Education Center

Managing Finances After Marriage

Young couple sitting at their kitchen table with a laptop, looking at their finances. Are you planning to get married soon? If so, financial experts suggest your first plan of action ought to be discussing how you’ll manage your finances together. Poor money management can unravel even the tightest marital knot.

Money is the number one issue married couples argue about, according to a study by Dave Ramsey Solutions, which concludes that couples in healthy marriages are much more likely to talk about their money dreams and make long-term money goals. While the subject matter of finances may not be the most romantic, you’ll want to make sure you and your partner are speaking the same language when it comes to creating a budget, paying down debt, setting financial goals, saving, and spending.

Have an open, honest discussion about all assets and debts you are bringing to the marriage and how you expect money to be handled. Be absolutely clear on whatever debt you each have and how much. Find out if your partner has excessive debt, an emergency fund, investments, and retirement savings. It’s imperative that you know your fiancé’s financials. It’s just as important to be open about your own situation. Going into a marriage with financial secrets is never a good idea.

Create a plan for merging accounts. Will you be the one to pay the bills? Or your partner? Will you keep separate bank accounts or merge them into one—or do both? Since marriage changes your legal status, you may want to take stock of changes to your tax bracket, insurance situation, and beneficiary designations. You may want to research a prenuptial agreement, which spells out which assets a spouse may want to give to children or other family members in the event of a death, as well as eliminates battles over assets and finances in the event of a divorce.

Write out your financial goals, and revisit those goals regularly. Include short-term and long-term goals. Is it to become debt-free? Save as much as possible for retirement? Start a business? Will you both continue to work once you have children? You don’t have to have the same exact goals for a successful marriage, but it’s important to be aware of where your goals align, where they differ, and how to support each other.

Create a budget. Start by going over each of your expenses over the last few months to determine how much you’ve been spending and if paring down is in order. Then, establish dollar limits per category that you create according to your after-tax income. Don’t forget to allocate for unexpected or irregular expenses, such as routine car maintenance or doctor’s appointments. Your budget may be a work in progress, so don’t worry if you have to make adjustments, especially over the first few months. This is also a great time to set aside money for an emergency fund. A common conflict among couples is to overindulge in frivolous purchases. While it’s important to always share big purchases with your spouse, it’s equally important that you each agree on a monthly amount to freely spend.

Tackle debt together. Bringing debt into marriage is trending upward over time, with younger generations having much more debt than the generations that came before them, the Ramsey Solutions study found. Indeed, 86% of couples who got married in the last five years started out in debt. The higher a couple’s debt burden, the more likely they are to argue about money.

Use debt as a way to work together as a team to accomplish the same goals and grow closer. And don’t play the blame game, insists Dave Ramsey. Here are some tips he recommends:
  • Don’t refer to it as “your” debt. That word makes a big difference in both of your perspectives.
  • Don’t hold over their head the fact that they had debt. If you were the one who brought in the debt, don’t hold it over your own head.
  • Don’t give up. Stick to the plan, and stick together. Find ways to motivate each other.
As long as you address the issue, know what you’re getting into and develop an appropriate plan, you can start building a marriage that heads toward your debt-free goals, according to The Penny Hoarder. If you find yourself struggling, seek the advice of a marriage counselor or financial planner who can help you get your plan in place.

Your local bank is a great resource for tools to help you save more easily, decrease debt, align your checking and savings accounts, and offer guidance for merging your finances.