Financial differences are among the most common reasons that couples split up — so make sure you and your future spouse have these important financial discussions.
Money related matters don't need to become major issues if you both go into your marriage with your eyes wide open — and keep lines of communication clear.
Why talking about money matters
Having a good understanding of how your partner thinks and feels about money can help draw you closer and work toward the same goals. Below are questions for both you and your future spouse. Make sure you answer them honestly and listen to your partner’s answers carefully. It will be worth the effort.
Know your partner's financial situation
You are likely to know each other's history in other areas of life; it’s equally important to know about each other’s financial history and current situation.
What assets and accounts are you bringing into the marriage?
You should know if your fiance owns a house or a car. And you should also know about other accounts like checking, savings, retirement funds and other assets.
What are your debts, including credit cards?
It's ideal to enter marriage debt free, but most Americans have some type of debt, whether it's a student loan, credit cards, a car loan or a home mortgage. The average American owes nearly $23,000 in personal debt, not including home mortgages.1
What are your credit scores?
Credit scores range from 300 (very poor) to 850 (exceptional). Your score helps lenders get a sense of how likely it is that you'll repay what you borrow. If you don't know your score, find out.
You have the right to request a free copy of your credit report each year from each of the major consumer reporting companies (Equifax, Experian and TransUnion) by visiting AnnualCreditReport.com.2
Are there any bankruptcies or other negative financial events in your past?
It's not fun to talk about money problems you've experienced, but being honest is crucial. Bankruptcies can have a long-term impact on finances and credit scores.
Do you want to sign a prenuptial agreement?
Some think that prenups are only for wealthy people, but 15% of the population have signed a prenup.3 Think of it like insurance or a financial safety net.
Compare expectations and spending habits
Your partner's financial history may be water under the bridge, but are you on the same page about how you want to handle things going forward?
Do you want to combine your finances or kеер separate accounts?
After getting married, many couples decide to merge their finances by setting up joint checking and savings accounts where you automatically deposit the bulk of your income for shared expenses like rent or mortgage, utilities, groceries and other living expenses.
Other couples decide to keep their finances separate. The choice is yours, but as you build your new life together, you may get tired of making two separate payments toward your monthly expenses or keeping track of who paid what.
Merging finances may help young couples align their financial goals and avoid scorekeeping. You can still have your own "fun" money by keeping your own individual accounts and making small contributions to them. Just make sure you have open discussions.
Are you a spender or a saver?
You probably already have an idea if your significant other is a spender or a saver. So, after asking the question, maybe ask another one: "Why?"
Perhaps your fiancé always orders out because their family didn't like to cook. Or maybe they're super thrifty because they have memories of their family not being able to pay their bills. Regardless of reasons, it's important to be aware of tendencies.
How do you spend discretionary money?
After paying for necessities, what nonessential items top each of your "most wanted" lists? Is it a vacation to the beach, a new set of golf clubs, a luxury handbag or something else?
What things do you consider to be essential versus nonessential? Is gym membership essential for your well-being? What about those streaming service, luxury handbags or your daily vanilla soy latte?
Take stock of your current choices, and make sure you'll be able to afford them once you get married and take on more large-ticket expenses as you build your life together.
What would you like to do with extra cash (work bonus, cash wedding gifts, etc.)?
How do you want to use money that's gifted to you? Put it in your savings account or toward your honeymoon fund? If your answers don’t sync up, you need to work it out, so it doesn’t create tension down the road.
Do you think we should pay off credit card balances each month or carry a balance?
Due to high credit card interest, let's hope your partner's answer is to pay it off each month, if you have the funds. This is crucial for long-term financial health.
What relationships have you already established with financial professionals?
If you've developed a trusted relationship with a financial professional, see if your future spouse is OK with working with them too. If you don't already work with a financial professional, consider it after the wedding.
Define your roles
Marriage is a partnership. You’ll need to decide who is going to handle the various aspects of your financial life.
How important is it to you to manage the finances?
Maybe you've been managing your own finances for years. Are you geared up to go another decade or would you rather hand over the reins to your spouse? It may be an easy decision, or it may take some discussion.
Who will build and monitor the budget?
Being in charge of a household budget is a big commitment. It’s important to know how much money is coming in and where it's going. But having a budget doesn't always mean complicated spreadsheets or accounting background. There are many budgeting apps that can make this easy and convenient.
Who will pay the bills?
It's much easier to keep track of what you owe and when if the same person pays for them every month. If you share responsibility for paying bills, make sure you're communicating so things don't get lost in the shuffle. Missing loan or credit card payments can be a substantial ding to your credit history.
Who does the taxes?
Tax season occurs at the same time every year, but it seems to sneak up on us. Getting married and the choices you'll make together can add complexity to this event. Are you comfortable doing your own taxes, or do you want to get help from a professional? Talk it over and have a plan so you aren't scrambling right up to the filing deadline.
Agree on your plans
Finances can be a big part of making long-term life decisions. Talk about your goals and what you need to get there.
How soon can we accumulate an emergency fund of three (or six) months' salary?
For most of us, it's easier to save for a tangible event, such as a vacation, than for an event that may or may not happen, such as a job loss or sudden illness. However, the unexpected does happen, and it’s best to be prepared. Having a financial cushion can help ease related stress.
What major purchases should we make within the next two years?
Once you know what it is your saving for, it becomes easier to do. Perhaps you want to buy your first house, a new car, or take a big vacation. After identifying what you want, figure out how much money you'll need to make it happen.
What is your timeframe for starting a family?
This may depend on your age and the goals you want to accomplish before becoming parents. Adding someone new to your family is a big decision and a significant financial commitment, so think about it and plan carefully.
When we have a family, will we both continue to work?
As you start to make plans for children, remember that childcare is expensive. Childcare costs are $550 to $1,500 per month on average for full-time infant and toddler care and $400 to $1,300 per month for preschool programs.4
Having one child in daycare may fit the budget, but if you want two or three children fairly close in age, this may not be something you can afford. One of you staying home for a few years may start to look appealing or more affordable. Beyond money, there are some other costs to leaving the workforce, so make sure you've thought about this decision carefully.
How much should we contribute annually to retirement savings, 401(k)s and/or IRAs?
Some say 15% of your pre-tax income is a good rule of thumb. It all depends on your current age, the age you hope to retire, the cost of of living and more.
If you're young, it might be hard to imagine not working someday, but that day will come, and you’ll want to be ready. Talk about your hopes and dreams that are just around the corner, as well as far down the road.
Goals can change, so keep the discussion going
You want to be sure your goals align with your partner's. And as you live your life together, what seems important can change over time. Be sure to frequently reassess what you and your spouse want to accomplish, talk through how things are going and make adjustments as you need
