How do I make sure my fiancé and I are on the same financial page before we marry?
When you’ve met The One, the last thing you want to do is compare spreadsheets. But I promise: If you and your special someone are planning to get married (congrats!), the most romantic thing you can do right now is have a financial heart-to-heart.
It doesn’t matter how compatible you are. Even though you’ve found the only other person in the world who loves French film, NASCAR, and grape jelly in their scrambled eggs, if you don’t see eye to eye on spending and saving, your perfect union is bound to have cracks that can cause trouble down the road.
A recent survey by the American Institute of CPAs and the Ad Council found that 88 percent of young adults (ages 25 to 34) who are living with or married to a partner say money decisions strain their relationships. One in five said that financial disagreements caused relationship tension every day.
Neal Stern, a Long Island–based CPA and a member of the American Institute of CPA’s Financial Literacy Commission, told me that openness is super important during the run up to a wedding. “A thoughtful upfront conversation can pay big dividends as you make decisions together that can affect your financial wellness for years to come—and help minimize stress when you hit those inevitable setbacks,” he says.
This conversation—or, actually, series of them—doesn’t have to be a buzz kill. I’ve talked to couples who—get this—came out of a money talk feeling closer after having done something hard and important together. If the thought of financial disclosure makes you hyperventilate, think of this as a trust exercise.
88 percent of young adults (ages 25 to 34) who are living with or married to a partner say money decisions strain their relationships.
And you don’t have to reveal everything all at once. Start off talking more broadly about each other’s values and beliefs about money. What’s worth spending a lot on? What is your partner’s attitude about going into debt?
But before you tie the knot, you’ll have to get down to those hard numbers. When you’re ready, here’s a quick list of financial figures you need to share:
- Your debts. What you decide will depend in part on whether you’re combining finances or keeping separate accounts. Either way, your partner’s financial past may affect you. Whenever you shop for a loan together, your partner’s outstanding debts will be factored in to how much you can borrow and what interest rate you qualify for.
- Credit scores. Yours and your partner’s will have a big impact on your life together. As with debt, credit scores might determine whether you can get a mortgage for your dream house—or starter condo.
- How much you both make. That way you’ll know how to budget for household expenses and how much you can each afford to set aside for retirement and other savings.
Other important topics to cover include cars (buying new vs. used), investing and retirement accounts, health insurance, and how you envision splitting up your money once you’re married (joint vs. separate accounts, or some combination thereof). This last one is something you definitely need to hammer out before your wedding day.
Then there’s the unavoidable matter of taxes. After the wedding, you’ll be faced with two options: “married filing jointly” or “married filing separately.” Filing together usually leads to a lower tax bill. There might be advantages to separate taxes, though. Take the IRS quiz “What Is My Filing Status?” now to guide you through this decision as a couple so you don’t have to agonize over it come April.
Don’t forget to discuss how you plan to pay for the wedding itself. Do you both want a big blowout (the average cost of a wedding in 2017 just clocked in at $26,000) or are you looking for a more modest celebration that will leave money for other important goals? (Need wedding budget help? Here are a few smart ways real people cut corners on their nuptials.)
Once you’ve both aired your dirty laundry, the hard work isn’t over. (Sorry!) Being financial partners is an ongoing project. I hear from too many couples that one person pays all the bills and the other never even glances at their account balances. That’s dangerous behavior. How can you stick to a budget if one person has no clue how much you’re spending? And should one partner become incapacitated or you ever split up (I know, it’s the last thing you want to think about), the in-the-dark spouse will be in a world of hurt. Come up with a regular time every month to discuss your spending and your goals, and see if adjustments need to be made.
The truth is, no matter how honest you are with each other, and no matter how closely your values align, you will still disagree over some money decisions. It’s right there in the marriage rulebook. But if you’ve laid the groundwork for honest communication from the start, you’ll be better equipped to work through those difficult times.
OK, now back to the wedding planning!