Mixing money is one of the hardest parts of a new marriage. Money problems are one of the leading causes of marital problems, and no one likes problems. Putting extra effort into joining your finances will set your marriage up for years of money success.
Before You Get Married
Have A Joint Wedding Budget: Planning the budget for your wedding together will give you a great opportunity to see how your partner thinks about spending and priorities.
Disclose Everything: If you are pledging your heart and your future, you need to be an open book. Each partner needs to share their credit report, credit score, current debt situation, and any other information that impacts their financial abilities.
Write A Budget For Your First Year Together: This can be the most eye-opening exercise. Actually sit down with your favorite budgeting tool and map out your spending plan for the first 12 months of married life. Be sure to include everything you can think of, and allow a 10% contingency for the things you’ve forgotten. (Hat-tip to Adam Funk, The Savings Coach, for this brilliant idea.)
Once You Are Married
Combine, but Separate: My advice for married finances sounds contradictory, but it really isn’t. I suggested that married couples share their finances completely, with a few notable exceptions. I strongly believe that each partner should maintain their own credit, usually by having at least one separate credit card account. I also strongly believe that the couple should contribute to retirement accounts for each partner, even if both partners do not work. There are good arguments for having small, separate savings accounts, too. I call this the “I love you so much that I want you to be able to take care of yourself if you have to” theory of couples finance.
Plan Ahead: Creating joint long-term goals is not only romantic, it’s also smart. Individuals rarely meet their goals if they aren’t SMART (specific, measurable, agreed-upon, realistic, and tangible), and that is exponentially true for couples. Goals are even more important in relationships where the partners have different money philosophies, habits, or background. When both partners are working towards the same goals, there is a lot less room for conflict.
Have a Little Mad Money: Having a little of your own spending money is super-important, especially when money is tight. When my husband and I were newlyweds, we each got $40 per paycheck for anything that wasn’t budgeted. That included haircuts, lunches out, cigars, make-up and books. This eliminates the feeling that you have to report every single cent that you spend, and it is easier to plan for a set amount.
Mixing money is challenging, but it also an integral part of building a joint life. Learn from those who have come ahead of you to make your path easier.
If this post has made you more curious about how other couples handle their finances, my friend Lauren at LB and the Money Tree has put together a massive compilations of new marriage financial articles at 30+ Piece of Money Advice for Newlyweds and Couples.