Planning Finances Together: A Guide for Newlyweds

Key Considerations for Managing Finances as a Married Couple

Wedding season is on, perhaps even more robust than usual following a year of social distancing that forced many couples to delay wedding ceremonies. If a wedding is in your near future, you likely have your big day planned. But have you taken the time to plan out how you and your soon-to-be spouse will approach joint management of your finances?

To avoid marital money issues, now is the time to determine how you and your future spouse will approach money management as a couple. Like it or not, divorce is a reality that many married couples eventually face, and arguments over money are the second leading cause of failed marriages.

Getting married and living together means collective expenses, from rent or mortgage payments to utilities, grocery bills, insurance payments, credit card debt, and many other unforeseen expenses. Add children into the equation, and finances become even more complicated. While it may be uncomfortable to discuss finances with your fiancé, doing so is a necessity for a healthy relationship.

Here are key points to consider when mapping out how you will handle finances as a married couple:

• Full disclosure is important: You and your partner should sit down and discuss everything from savings and assets each of you are bringing into the marriage to any debt you have from student loans, credit card bills, or car payments. Failing to disclose significant debt to your partner can lead to resentment down the road, as any debt or negative credit rating held by one partner can impact mortgage rates and other joint loans.

• Consider meeting with a financial planner: A third-party professional can provide unbiased advice for managing joint finances, making these conversations matter-of-fact and less uncomfortable.

• Decide on your financial structure: Will you maintain separate finances, hold assets jointly, or take a hybrid approach? If both partners are working, consider a fair split of joint expenses, especially if one earns more. Also, determine how much you’ll save together and how much will be kept for personal use.

• Consider a prenuptial agreement: With people marrying later in life, some may already have significant assets. Discuss whether a prenuptial agreement is appropriate to protect personal assets if things don’t work out long-term.

Identify short- and long-term goals as a couple, and set a budget to help achieve those goals. A clear budget from the outset can simplify financial conversations. Also, decide who will handle managing day-to-day finances, such as paying bills and tracking your budget and goals. Dividing these responsibilities can help avoid misunderstandings and arguments down the road.

• July 19, 2021
• Community
• Alpine Bank

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