Money Management for Newlyweds: Building a Strong Financial Foundation

Photo by Samantha Gades on Unsplash

Wedding season is upon us. Between now and September you are bound to be attending many weddings of friends and family members. Or maybe you yourself will be getting married. Marriage is beautiful and there is no greater joy than to share your life with someone you love. But often with marriage, comes trials and tribulations. One of the top three things that couples fight about is money (second to sex).

Money is a complicated topic that often brings up many emotions. Today I want to explore how to start your married life out right by ensuring you are setting up your relationship for success. We will explore the many ways you can set a strong financial foundation, prior to getting married, that will ensure your relationship can weather any financial storm.

Open and Honest Financial Communication

Before marriage, it is important to be transparent with one another about your finances. This starts with taking inventory of your financial ancestry. Start by asking one another some simple questions about how you viewed money as a child up until now.

1. What sorts of memories do you have as a child from how your parents/guardians/family/friends handled money? What insights do you derive from this memory?
2. What are your financial strengths? What do you struggle with?
3. What is your preferred way of managing your finances? Do you think it will change once you get married? If yes, how so?
4. What is your risk profile (very risk, moderately risky, not very risky)? Why do you think that is?

I also encourage couples to list out all their debts and all their assets and share with one another PRIOR to getting married. As unsexy as it seems, marriage is like negotiating a contract, so you should have full transparency about what you are committing to. In many states, you are taking on responsibility of a partner’s debts, so it is important to know what that looks like.

Set Financial Goals

As a couple, you should be defining what you want to achieve together. Again, not sexy, but even though this is a relationship, it is also a partnership. If you went into business with someone, you’d want to know what their motivations and goals are for your joint business. In this case, your marriage is the business. Ask your partner questions such as:

1. What are some short term goals (a raise at work, new job, vacation, new car, paying down debt, …)?
2. What are some long term goals (buying a house, having children, starting a business, retirement, …)?
3. What role do you expect your partner to play in achieving these goals?
4. What will we do if our goals do not align or there is disagreement on what to prioritize first?

These sorts of questions can be helpful in rooting out hidden expectations. You and your partner might think you are well aligned, but sometimes these questions can help identify potential conflicts before you are in the heat of the moment of having to decide.

Align on How You Will Manage Your Finances

This is a crucial step to tackle before you move forward. It is important to align on a plan of how you will manage your finances, and then assign tasks/responsibilities to one another. This helps to ensure you know who will be doing what, but will also ensure you are aligned on how to move forward together.

1. Will you manage your accounts separately, jointly, or some combination? If combined, how will you decide how to check in with each other about how much money is in the account and upcoming purchases? Some couples have a defined amount of money (e.g. purchases over $200) where they have to talk to one another before making the purchase. If separate, who will be responsible for paying what? How do you ensure that each person feels it is fair? What happens if one person has a change of financial circumstances (loses their job, takes a pay cut, makes more money, stays home with the children, goes back to school, receives an inheritance, etc)?
2. Set a budget. Determine up front how you will check in on how you are doing against your budget (weekly meeting? Monthly? One partner responsible?). Use your savings goals from above to build your goals into your budget.
3. Talk about debt. Identify a strategy for dealing with debt. Is each partner responsible for repaying their own debts, or will you work to pay the debt off together? What about debts acquired together?
4. How will you save for retirement? Will you be more or less aggressive towards this saving goal?

Seek Financial Help

Money might be a personal topic, but it doesn’t mean you have to have these sorts of conversations alone. In fact, sometimes it is often helpful to have a neutral third party who can help navigate any potential sore spots or disagreements. This can look like a premarital course or counselor, a therapist, or even a financial advisor. Ideally this would be someone you feel comfortable with, but isn’t a family member or friend.

Managing your finances as a married copy doesn’t have to be scary. Treat these conversations as a way of creating financial intimacy with your partner. Tackling these tough topics before you get married ensures that you start your relationship off on the right foot. And remember, you don’t have to go it alone. There are lots of resources available to help navigate these conversations.

So tell me, if you are currently married or have been married before, what financial advice would you offer a couple about to get married?