4 Ways to Make Finance in Marriage Stress-Free
First, let go of the need to have it all together
Money + Personal Relationship = Stress (Sometimes)
Take, for example, that one cousin who asked you for $50 to cover their phone bill, promising they’d pay you back when their next paycheck comes through.
You casually respond…
“Yeah, sure. Don’t worry about it…”
Which really meant…
“Okay, don’t feel bad for asking, but I still want my money back come next paycheck.”
Six years worth of paychecks later and a family reunion in between, that $50 was never seen again. Meanwhile, despite the bitterness brewing because of their lack of consideration, you’ve never brought it up in an attempt to preserve their dignity.
Also, you don’t want to have to pull a Rihanna. “B**** betta have my money!”
Now that I’ve gotten that off my chest, it’s no wonder that a study by SunTrust Bank revealed 35% of romantic relationships noted finances as the primary cause of stress within the relationship. Let’s not forget the slew of marital finance horror stories we hear (think Tyler Perry’s A Fall from Grace).
If you’re considering marriage, what does that mean for your blooming love? Are you doomed to squabbles about bills and excessive Amazon purchases? Definitely not. What it does mean is, as superficial as green paper and plastic cards may seem, they matter in a relationship — especially a legally binding one.
Money holds significance not because of surface issues like how one spends it but rather our personal value system for what it represents — security, stability, independence, power. Those values are tightly integrated with our worldview and even our identities. Hence, it gets personal. So, when considering marriage, avoid taking the topic of finance too lightly or worst, avoiding it entirely.
Here’s where I’ll make a plug for pre-engagement counseling. In pre-engagement counseling, you’ll address this hot-topic of money before committing to blend your financial belief systems. It’s one step you can take to bring some ease about the subject of money in marriage.
In addition to laying out your financial DNA in counseling, here are four ways to shift your perspective and transition from single money to married money with ease.
Stress less about having less before marriage
A burning question that plagues young lovers looking to marry is how much wealth should one accumulate before walking down the aisle? Let’s whip out our mental calculators and estimate.
- The average cost of an engagement ring is over $7,000
- The average cost of a wedding is $38,000.
- The average cost of a honeymoon is nearly $5000.
So far, we’re at $50,000 for the expected costs. Now let’s tack on typical auxiliary expenses post marriage.
- The average home price of $300,000 suggests a $60,000 down payment.
- The average cost for raising one child for one year is $14,000.
I have one more number to throw your way.
- If in your Twenties, CNBC suggests saving 25% of your gross annual pay before marriage.
Yeesh, marriage sounds expensive!
For this glaring reason, and as the trends indicate, delaying marriage appeals as the wiser choice. Even more so, when there are more pressing matters like paying for the debt that comes with continuing higher education to lock in a successful career needed to keep up with increased cost of living.
My husband and I were not one of the wise ones. Impatient is the right word. I had over $50,000 of student debt that I struggled to pay with my entry-level salary. I barely had credit, and I lived in half of a garage converted into a tiny studio apartment. My husband was living with his mother in a one-bedroom apartment. We purchased our wedding bands on Overstock.com. I bought my wedding dress at a thrift store. Our honeymoon was one week off of work spent frequenting Ikea.
Six years later, we survived and are doing okay.
Yet, in our “rush” to get married, I learned something I hope will alleviate some of the pressure many feel to have it all together before marriage:
You don’t need a lot for marriage.
The only cost that is required is a stately fee for the marriage license, which is typically less than $100. Anything else beyond that should be because of the lifestyle you personally desire for you and your partner and not because of external pressures for what your financial status should be.
If you choose to start small, here’s an added lesson from my rush into marriage:
Embrace the humble beginnings.
One of the most memorable moments of my first year of marriage was when the transmission of my 2001 Civic went kaput. We just came from the heels of spending a whopping $3,000 on a wedding. We also spent our monetary gifts on furnishing our tiny apartment during our honeymoon at Ikea. All that was left was a $120 belated gift card from my husband’s co-workers. That gift card was all we had to hold us over with bills, food, and train fares for two weeks until the next paycheck.
I look back on that time with fondness. Financial struggles can be an opportunity to forge deep bonds, especially when you can look back and see how far you’ve come. You can appreciate how having the basics — food, shelter, clothing — puts you far ahead of the game.
Stress less about your partner’s financial mess before marriage
We’re all young and dumb at some point. Top that off with lack of guidance on economic principals like what a credit score is, and many of us have been left to learn lessons on finance the hard way.
When it comes to marriage, there’s a concern that a partner’s skeleton in their financial closet can come back to haunt the other after tieing the knot. Rest assured, it does not. The debt incurred before marriage will remain the sole responsibility of the partner in debt.
However, let’s not stop there. Here are some points to consider when it comes to dealing with debt and financial mishaps pre-marriage.
- Lay it ALL out. Use pre-engagement counseling to flesh out ALL financial skeletons such as bankruptcy, wage garnishment, or gambling.
- Understand the root cause: A $10,000 credit card debt due to purchases of Gucci belts can reveal fundamental belief systems about money. Dive into the motives behind financial decisions that lead to poor credit. It’s an excellent way to determine if you both are on the same page.
Stress less about contributing less or who has financial dominance
A dynamic that can come with marriage is the financial power play. The partner deemed as the sole breadwinner or the one earning the most is perceived to have the most say in the finances. In turn, the partner contributing less may feel less inclined to have an input.
There’s an underlying “what’s yours is yours, what’s mine is mine” mentality that can breed tension. However, the very definition of marriage contradicts this notion. Marriage, after all, is a union.
Instead, view finances in marriage as the partnership that it is. One practical way of emphasizing financial partnership is by taking turns budgeting and analyzing the funds. This allows both of you to have a big-picture understanding of the finances and give input.
Stress less about the oneness of accounts
You can’t talk about marital finances without the big question:
To join accounts or not to join accounts?
That is the question. One answer is joining accounts is the only option when committing to a union like marriage. The other answer is financial independence matters too, and separate accounts are needed. No matter where you stand on the issue, here are a few points to keep in mind when discussing this topic.
- It doesn’t have to be all or nothing. My husband and I came into marriage siding with the first answer; we would certainly have a joint account. As time passed, we’ve gotten separate credit cards and investment portfolios. The lesson here is the decision to join or not join accounts can shift depending on your financial situation. For instance, we decide to finance a car or open a credit card under one name after evaluating the impact of the new account on our credit reports.
- Manage finances in truth and trust. No matter which route you take in joining or not joining accounts, manage the finances in truth and trust. If there’s a need to keep expenses secret or an account hidden, then there’s no trust. If there’s a fear that financial autonomy will be taken away, then there’s no trust. One way in which my husband and I have kept our finances open despite having some separate accounts is by linking everything to a financial management application like Mint. That way, we both have a glimpse of everything in one place.
Bonus Tip: On marriage and taxes
In addition to joint accounts, there’s also the decision to file an annual tax return jointly or separately. U.S.News has finely detailed the advantages and disadvantages of both choices. I highly recommend conducting your research, but here are two things I’d like to highlight about filing taxes when married.
- When it comes to filing your first tax return post-marriage, as U.S.News suggest, crunch the numbers first to determine which tax bracket you fall under. For our first tax return, we filed jointly. My husband was surprised to have owed taxes when he was used to receiving refunds. We weren’t aware that our joint incomes qualified us for a higher tax bracket.
- The income noted on your tax return, be it joint or separate income, is used in evaluating your eligibility for Financial Aid and loan repayment plans. In my case, I thought I would qualify for a lower loan repayment plan because of my income. But, based on having filed jointly, it wasn’t just my income they took into consideration.
These are minor details to consider but they are ways marriage does impact your finances.
Money + Marriage - Pressure + Preparation x Truth&Trust = Less Stress
Money in marriage does not have to be an area of contention. Instead, let it be an opportunity to grow together. Grow in learning about what you both value. Grow in trusting each other. Grow in becoming one in your finances.