Money and Marriage: Financial Questions To Settle First


money and marriageNow that the question has been popped, you can get on with the matter of setting a date and securing a venue. But before you start trying on formal wear and choosing colors for the bride’s maid dresses, there are a few more questions to be popped, hashed out, discussed, and debated till there is 100% agreement. Those questions have nothing to do with the flavor of cake, and everything to do with finances.

Among other things, marriage is a business arrangement. There are business decisions to be made that have everything to do with money. Until now, you and yours have been involved in an unofficial, ad hoc partnership. Now, you are about to move to a full-on merger. It is perfectly appropriate to sit down with an estate attorney and financial advisors as you sort out your various financial planning options.

There are many questions about finances that need to be settled before getting married. Couples should spend a bit of time researching the Web for a whole host of topics including:

• Investments
• Types of bank accounts
• Insurance
• Loans
• Retirement

You can go to sites like Wisebread.com, or BankingSense.com, that deal with all of these financial matters and more on a continually updated basis. Beyond the major topics, there are specific questions every couple should be asking:

How much financial independence will there be in the marriage?

There is no one right answer to this question. Some marriages work well when one person is the financial manager. There can be less conflict about who spent what, and how much is available. Financial matters can be greatly simplified with that arrangement.

On the flip-side, when accounts are separate, each party is responsible for a certain portion of the bills. Assuming each party pays the bills on time, there may be less opportunity for conflict over spending money.   Whatever your ultimate answer, the question most certainly should be asked before the marriage license is signed.

Do we have compatible spending habits?

Studies show that we seek out compatibilities in a mate in most matters with the notable exception of spending habits. Those same studies also show that incompatible spending habits make for a less happy marriage. A spendthrift hitched to a penny pincher is an unlikely combination for success. The more conservative party will always be frustrated with the fact that there is never any surplus for saving an debt relief. The sloppy spender will want to enjoy the now even if it means suffering later.

These issues do not go away over time, and if they are not dealt with before marriage, these differences can lead to conflict.

How much debt are we dealing with?

Another often overlooked financial matter to be sorted before the wedding is debt. It is almost impossible for two adults to come together without some debt liability. If both parties are paying on a car, that is debt. There is also the matter of a mortgage. Beyond managed debt, there are the student loans with outstanding balances, and are not going away. There are the hospital bills which just keep piling up. There was that one mistake with the taxes four years ago. There is the credit card balance you keep meaning to pay down.

Debt adds up. But the thing that really hurts the marriage is the debt you don’t know about. If your partner carries debt that was not previously disclosed, it can feel like a betrayal of trust. Unaddressed debt that enters the marriage has a good chance of sticking around for the long haul. It may be a good idea to postpone the merger until each of the principals have addressed their debt. Make it a priority to go debt free as soon as possible.

There are more questions that should be asked, but this is a good start. More than half of all marriages end in divorce, and that number just keeps going up. I suspect that a good many of those divorces started out with unasked financial questions. Make sure your marriage isn’t one of those. Be sure to ask the big questions. There is plenty of time to sort out those bride’s maids dresses.

Readers: Do you have any tips for dealing with finances for newlyweds?

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5 Responses to Money and Marriage: Financial Questions To Settle First

  1. TB at Blue Collar Workman 07/15/2014 at 9:36 am #

    One thing that worked out great with my wife and me was finances. When we got married, neither of us had anything. Nothing in any bank accounts — in fact, did we even have bank accounts? But we didn’t have any debt either. We were just at zero. So we went through everything together with finances, and so there were never any problems. Guess that’s one positive of marrying so young!

    • Paul 07/15/2014 at 3:32 pm #

      That is great that you two had the opportunity to literally start from the beginning! Obviously you were on the same page!

  2. Michelle@PennyThots 07/19/2014 at 6:01 pm #

    My husband and I were walking into our marriage with almost the same amount of student loan debt (which was and still is a lot more than we want). We had various amounts of credit card debt, but to us, debt was debt and we needed to pay it down as fast as we possibly could. It has been a journey that has made us work together and work as a family unit. Even though debt can sometimes drive a wedge between people, the progress towards paying them down has brought us together.

    • Paul 07/19/2014 at 9:48 pm #

      Great point Michelle! What ever your financial situation the most important thing is that both spouses are on the same page!

  3. Thea @ Monster Piggy Bank 08/06/2014 at 7:12 am #

    It’s a good thing that me and my husband started out with no debts as well. I guess we are one of the few lucky ones who have compatible spending habits. Great article!

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