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Marrying Your Finances

Marrying Your Finances

Before you say “I do,” it’s a good idea for the two of you to talk about finances and agree on how you’ll handle them. Marrying your finances will ensure your marriage gets off to a good start.

Financial Baggage

Have a discussion about how you’ll handle premarital debt. Will your spouse be solely responsible for paying off his or her old debt or are you going to pay a portion of it? Keep in mind that if your partner has many large debts and has a pattern of irresponsible spending, the behavior may not stop after you’re married.

You’re not responsible for any debt your partner accumulated before marriage. However, if you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), after you marry, you and your spouse are jointly responsible for any debt either of you accumulates. If you apply for credit jointly and your spouse has a poor credit record, their record can damage yours. It may also affect your ability to meet shared financial goals, such as buying a home.

Combining Finances

There are several different ways to combine funds. Some couples keep their financial accounts separate and divide expenses equitably. Others open a joint account for shared expenses as well as keep their own personal accounts. Many pool all their money into a shared account.

Agree on a Budget

In marrying your finances, it’s important to create a realistic budget. Have an open discussion to figure out short- and long-term financial goals that will work for both of you.

• How much you will invest?
• How much you will deposit in savings each month?
• How much will be set aside for emergencies?
• How much should each of you be able to spend as you wish?
• Will both of you have full-time jobs, or will one of you work part time or stay home?
• If one of you has higher income, will you each pay an equal amount for joint expenses or pay a percentage of your income?

Who’s In Charge of Our Money?

It’s a good idea to decide who will manage your money. Who will keep track of your checking, savings, credit cards, loans, investment accounts, or bill payment? You can divide the responsibility if it makes sense for you, but both of you should be aware of where your money is going. If you don’t identify these responsibilities upfront, bills may go unpaid and accounts might get neglected.

Not everyone is the same. We all have different skills, aptitudes and shortcomings. Someone who is good at making a budget, for example, may not be so good at making a good deal on a car. Discuss who has an easier time staying organized, keeping track of bills and finding ways to save on expenses. Don’t be judgmental.

Agree to have frequent meetings to discuss your finances to make sure you’re sticking to your budget and are on track toward meeting goals. If you anticipate major expenses, discuss how you’ll handle them.

Having these financial discussions before you marry may not be a very romantic thing to do, but they’ll help ensure your relationship remains happy, stable, and strong.

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