By today’s standards, Will and I got married fairly early (the month after we graduated college). Living and working on campus, we didn’t financially establish ourselves as individuals before our finances joined. This honestly made things easier as we didn’t have to change old financial habits. We just created new habits together.
Through our experience and witnessing dozens of situations as an advisor, I’ve formed opinions on financial topics to address before marriage.
It should give you and your partner some items to talk about!
BEFORE THE WEDDING
1. Get honest about your credit health
A great wedding gift you can give your future spouse is a healthy credit score! If your score is unsavory, tell your partner now, before you get married. They deserve to know what they are getting into. After all, the ability to buy the home of your dreams might be hampered by a bad score.
If your score is not where you want it to be, walk your partner through your plan for improving your score. Here’s what I recommend including in that plan…
- Make ALL your payments on time
- Decrease your credit card balances (make more than the minimum payments)
- Refrain from opening new, needless credit cards
- Consider consolidating debt (companies like SoFi can help with this)
2. Determine how you would like to bank
What I like about joint banking:
- You have fewer accounts to keep tabs on (helpful for security monitoring)
- You can both keep aware of your entire cash flow situation
- It forces communication if you want to make a notable financial decision or purchase
I’ve heard contrary statements supporting separate accounts such as:
- Neither spouse feeling “controlled”
- The need for privacy
- Having security in the case of disputes or divorce
Addressing these counterarguments, if you deal with controlling behavior from your partner, feel you have to keep your transactions hidden, or foresee a likelihood of divorce, consider that perhaps you should not be marrying that person.
Plus, keeping your money in separate accounts doesn’t necessarily protect it from divorce anyways. CNBC has a helpful article explaining why.
I realize that people can hide dark parts of their lives and that people can change. This is why I am a fan of premarital counselling! Regardless of how you choose to bank as a couple, be sure you’re both on board with how you’ll communicate regarding your account(s).
3. Figure out each other’s financial strengths and weaknesses
Are you the partner who is more organized?
Are you the partner who frequently checks their credit card and banking apps?
The one who likes to research financial tools?
The one who is the better saver?
The bigger spender?
The better planner?
You are at least one of these in your relationship. Together, determine who is better at what. Based on your strengths and interest, determine who will take what responsibilities. Dividing the work will save you both time.
NOTE: just because you may not be in charge of one duty does NOT mean you are ignorant of it. Ensure the other partner knows what you accomplished, and that they know how to do it themselves.
4. Don’t splurge on a wedding
Including the ring and honeymoon, the average wedding costs $38,700! That’s a down payment on a house and a far cry from the “cake, punch, and mints” days.
Want to avoid divorce? Have a cheap wedding. Did you know:
- The more you spend on a wedding, the more likely you are to divorce.
- The more people that attend your wedding, the less likely you are to divorce.
It boils down to not adding strain to the relationship while you are trying to build the foundation for your lives. If one person overspends on the wedding against the other’s wishes, it can lead to lasting resentment that rears its ugly head years later.
AFTER THE WEDDING
5. Get your name changed FAST
If you plan to change your last name after the wedding, don’t wait around. It is easier to get it done right away.
This way, when you combine your finances, your new, correct name will be on all your statements and you don’t have to go through and change them all again later.
6. Check into your car insurance
You may get a discount if you purchase your car insurance together. Talk to each of your existing providers and ask for a quote. If you aren’t impressed, shop around! Plus, your insurer should be aware that there is a spouse who may be driving your car on occasion.
7. Update your utilities and titles
Unfortunately, you cannot always put two names on a utility bill. If you can, do it. This will allow each of you to talk to the utility companies. Also, if one of you is injured or passes away, there are less hurdles for the spouse.
Otherwise, be sure that each of you have your name on at least two different utility accounts. If only the wife’s name is on all the bills, the husband might have a tough time proving his address (such as when renewing a driver’s license).
For the same reasons, it can be a good idea to get your car titled in both of your names. If your name changes, you will update your title anyways. Just do it at the same time.
8. Update your beneficiaries & estate plan
This might vary depending upon your relationship. Some people may wish to change beneficiaries before they are married. I recommend waiting until after.
Once you are married, many retirement accounts require that only a spouse be listed as the primary beneficiary (unless the spouse gives their consent for others to be designated).
Sit down, discuss the topic with your partner, come to a decision, and make the changes. Visit an estate planning attorney to update (or create) your wills. You can read more of my thoughts on this topic here.
A PERSONAL STORY
I like paying my credit card off at the end of each month. Just one payment, once a month. Each month’s balance is about the same.
On the rare month that my balance is higher, I give Will a heads up, since he is the one who monitors the bank account. I just say, “Hey, my credit card bill is $XXX this month. I paid it today.” It’s a 20 second conversation done for the sake of good communication, not out of necessity. He’s happy – I’m happy – we end the 20 second conversation feeling good.
However, I sensed he was bothered in one instance. He wasn’t outright voicing any discontent, but it was there. When I asked if there was something he wished I had done differently, he said he would prefer that I pay the balance halfway through month, and then make a second payment at the end if I expect a large balance that month. That way, there is not one large swing in the bank account, but rather two smaller payments. This was only a matter of his personal preference. (And your spouse’s personal preferences matter!!)
It was that easy. That was all it took for a potential financial conflict to dissipate into a simple 1 minute conversation. Communicate!It was that easy. That was all it took for a potential financial conflict to dissipate into a simple 1 minute conversation. Click To Tweet
Getting married is awesome. 10 out of 10 huge fan. Remember to plan ahead, have the tough conversations, and work as a team!