Ten Financial Matters I Wish I Had Discussed With My Wife Before We Got Married

marriageI adore my wife – she’s a wonderful woman and a wonderful mother. We go together like two peas in a pod on most things, except for money (and cats, but that’s entirely off topic). We’re both frugal, but she’s never been into any sort of financial planning at all, and this has led to many, many strange and sometimes uncomfortable discussions, and because we didn’t sit down and hash out basic financial things before we got married, there have been a stream of uncomfortable financial issues that have cropped up during our marriage that led to nothing but confusion and disappointment because we weren’t on the same page to begin with.

If you’re about to get married, I would strongly encourage you to take a few hours and discuss these ten questions with your spouse-to-be, just so you know what’s going on.

How much money do we have? What’s in all of your accounts? Hint: if you’re hiding things here, then it doesn’t speak well for the level of trust that will be in your marriage.

How much debt do we have? This needs to be completely honest, with all cards on the table, or else you’re just begging for a big fight after you get married. You will be much, much better off if you both reveal your complete, true financial state, because if you do not, you’re hiding a major skeleton in the closet that will someday jump out and really, really disrupt the tranquility of your life.

How much income can we expect? What do you both make in a year? Will that grow in the future? How steady is your employment? Will there be enough money to pay for the standard of living that we’re envisioning together, or will we have to make an adjustment?

What are our known and required expenses? You’ll find yourself saving money on most of these things when you get married, but you need to touch base on all expenses. Perhaps one of you has alimony payments, or else has several maintenance prescriptions that need to be kept up. These financial requirements are important and need to be specified right off the bat so that both parties know what’s required and you don’t have an argument about them later on.

How much do we frivolously spend each month? If you’ve been burning through money to put on the impression of being wealthy to impress him or her, you need to come clean about this now. If you’re a shoe addict, or have a thing for your DVD collection, be honest about the cash you’re burning on these pet projects, but also be realistic about how much you’re going to cut down (if at all) when you get married. If this will cause problems, it’s best to talk them out before the marriage than after.

Should we use an allowance system for frivolous spending? You need to specify how you’re each going to be realistic and fair about frivolous spending. It’s not healthy for any marriage for one person to spend like crazy while the other one doesn’t have a dime, and it’s also not healthy for both people to spend a certain amount, but one person “spends” more with the help of a credit card.

Will we combine our money? For most couples (but far from all couples), combining your money is the best choice. Many argue that not doing so indicates a lack of trust between the two sides, but there may be reasons for keeping them separate. Talk about this in detail and plan for the best move for you.

If combined, who will be the primary money wrangler? In most marriages, one member handles most of the financial decisions. Be clear on who that is going to be so that you aren’t caught in situations where you’re both making moves and the right hand doesn’t know what the left hand is doing. Who’s going to make sure the bills get paid and also keep track of the money that needs to be in each account?

How will we combine our physical assets? Figure out what items you’re going to keep after marriage and figure out a fair way to get rid of the excess so no one is upset with anything. I recently heard about a wedding where both people had houses before marriage, but in the month before the wedding, one of them sold their house and went on an $15,000 shopping spree. From what I hear, the “honeymoon” period was quite short in that one.

When we marry, what will happen to our estate? Obviously, in the event of one of you passing, all assets should go to the other, but what if you’re married and you both pass on? If you’re about to marry someone that just assumes that everything will go to her niece, then you may want to clarify things before you even jump in.

Trust is the key to any marriage, and money can be one of the hardest parts to build trust on. Take the time to do it right.

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  1. Ted Valentine says:

    You should discuss children (assuming you don’t have them already) if you plan to stay home and raise your kids. You need to plan for this from the outset. That means living on one income even though you have two.

  2. David says:

    Great article. My wife and I went over much of this stuff by default by living together for a few month before the wedding ceremony. Of course, these are topics that one tends to revisit every few years anyway it seems. (Not in a bad way, but in readjusting things.)

  3. I just wanted to add onto your point about most marriages have one person taking point in the finances. Since I got married, I’m the one who is the primary decision maker and I handle all aspects of our finances. My wife trusts me implicitly. I do make it a point to touch base with her at least once a month on what is invested and the status of all our accounts… debts, savings, investing etc.

  4. Andamom says:

    Hey Trent — I wrote about the 2 items that I asked my would-be husband for before we got married (http://andamom.com/?p=68): his resume and his credit report. Putting all the cards on the table means complete honesty — and seeing everything. I didn’t want any surprises — and felt that I deserved to know what I was getting myself into. Based on that information, I could make a justification one way or the other… We ended up handling the finances pre-marriage and have been working on building our asset base ever since.

  5. Mitch says:

    Indeed, Ted, and all other such Large Future Dreams, revisiting them regularly as David adds. Even if neither of you wants (more) kids, there will still be things like this: one person wants to start a business, another wants to retire early and live in the mountains. Or this: one wants to travel more, and another expects to care for aging parents. Or this: one wants to move to a different town for grad school, and another wants to cut back to part-time work.

    But that may be the beginning of a whole other post….

  6. k says:

    11. How will you handle pre-existing assets and pre-existing debts AFTER the wedding? i.e., will each be respnsible for paying off their individual debt, or will paying those off be a joint goal? Will house equity, retirement savings, or other assets go into the “community pot” or will these things “stay with” the individual who acquired them? If they will stay separate, how will decisions about those assets (e.g., stock picking) or their earnings (dividends, appreciation of real estate) be handled in the future? And lastly, how do your answers to these questions compare the the family law default in your state? If those answers differ from the law, you will either both need to be comfortable with a prenup or with revising your expectations about how those assets and debts will be managed.

  7. David Hunter says:

    Excellent post!

    I agree wholehearted, and often it can be the little things that are disruptive, my wife and I invest in real estate, but we often have disagreements about how well we are doing, or what constitutes a good buy. I maintain if it makes a profit and doesn’t cost you then it is a good buy, she holds it is only a good buy if that profit is cash in hand rather than cash paid off the loan to finance the property…

    It bears talking about all of these details with the one you are going to share your life with

    Cheers
    David

  8. Andy says:

    It’s great to get the cards out on the table before you tie the knot, but you shouldn’t run your lives like a business. You have to have a financial plan that can set limits and goals, but you can’t plan for everything — that will just lead to arguments about hypotheticals. What’s critical — and we’ve been married 30+ years — is shared decision-making. For example, One may be responsible for short-term financial issues, i.e., household budget, short-term savings etc. while the other is responsible for longer-term financial issues: investments, insurance, etc. This way, a discussion about finances is not one-sided. You get married for a lot of reasons but division of labor is, after all, one of them.

  9. Bob says:

    Now you tell me. I’ll be paying for the rest of my life on some of these.

  10. monica says:

    To add to this, I would like to suggest talking about creating wills, living trusts, irrevocable trust, etc. once you’re married.

  11. Ellen says:

    Well, in the three days we have left before the wedding, I’m sure we’ll find time to bring these up!

    Just kidding; we’ve been living together for 18 months and are a really good fiscal fit–both savers, but not overly controlling either. *shrugs* Now the only fights will be remote-related. :D

  12. r says:

    This is interesting.

    Aside from the discussions, I’d be interested in what actual specific steps one needs to do when merging finances upon marrying.

    For example, I can think of things like putting a house in both names or merging bank accounts, but… I don’t have a clear picture of the details, and I’m sure I’m forgetting things. For example, are there things that need to be done regarding insurances? Supposing one is interested in totally merging one’s finances as far is is financially sensible, should you somehow consolidate credit cards, or does it make sense to just add each other to the credit cards you each already have so as not to hurt your ratings (and what if you each have the same card already)?

    Basically: if you think there are some tips for how to do this in a smart way that aren’t obvious (or even that are!), I’d love to hear them!

  13. Matt says:

    Would you suggest even talking about divorce (heaven forbid) especially in terms of financial implications and a pre-nuptial agreement? Of course you don’t want a marriage to fail, but the same is true of a business. And with a >50% divorce rate these days it usually hits at least one person hard if it happens.

  14. Richard says:

    Good questions to ask. I have 4 months to go until I’m married :)

    To the question, “If combined, who will be the primary money wrangler?” I would add this point. You both should be able to wrangle money, I think having one person doing the money wrangling ALL the time puts the other at a disadvantage. I would suggest rotating that role, somehow, maybe having the secondary wrangler be the primary once a quarter.

    I would apply to same comment to all the “roles” we take on in marriage, where possible. Cook, cleaner, gardener, lawn cutter, snow shoveler, launderer, etc.. If the other is not there, for whatever reason, there shouldn’t be too steep a learning curve to play the roles that would need to be played.

    One of the things marriage is to me is two independent individuals choosing to come together to live their lives interdependently. Having one person do that does that same things all the time has the potential to create an unhealthy dependence.

    I’ll see how easy this is to apply when I get there :)

  15. DavidM says:

    Regarding the “Will we combine our money?” question, my future wife and I did not even consider the thought. In fact, the subject was part of our pre-marriage counseling, as well it should be for everyone. I can’t see the “two becoming one” while having separate checking accounts.

    Can somebody explain to me when it is a good idea to have a his & her money scenario? Not that it will change our minds, but I am just curious.

  16. r says:

    @DavidM – Just to give you one common example (out of many potentials!), I know couples who have chosen to keep their money separate when one or both members of the couple have legal dependents who may not live with them, but for whom they are financially responsible. This is not necessarily children from a former partner – it can be ailing parents, or, in one case I know, a severely disabled sibling. Often this is a legal issue as much as anything else – but in the cases I’ve known, the individuals involved feel that it has helped them significantly in dealing with some often difficult issues to do it this way.

  17. 60 in 3 - Fitness and Health says:

    I would add some more items to the discussion.

    What are our dreams?
    When and if do we plan to have kids?
    Do we have any plans that will affect our income such as going back to school?

    All of these are things you want to workout before and not after the wedding.

    Gal

  18. Victor says:

    DavidM – My Wife and I have our own bank accounts, as well a shared one. The main reason we have the separate accounts is for the direct deposits from work. It was easier for us to open an account together and setup automatic transfer of funds to it from our separate accounts. We know how much money we have in all accounts and we don’t hide things, except for comment below…

    We also have the separate accounts so we can buy gifts and things for each other without the other finding out about it beforehand (don’t want to ruin the b-day surprise!). =0)

  19. Sm4k says:

    Somewhat echoing an earlier comment, I am marrying a woman who has a child from a previous marriage. One of the things we have discussed (and need to discuss further) is what would happen to that child in the event of her death. Whether or not I will be raising him has a pretty heavy financial tie to it.

  20. Mel says:

    My husband and I didn’t have a joint account until a year after we were married and 3 years after we started living together (although we did have access to each other’s accounts). We don’t even have a shared checking account today, just a joint investment account that we use to save and tackle large projects. If you can’t trust your spouse to have their own account and still work toward the common goal, what good does it do to share an account? I can understand having a common account for living expenses but you don’t ‘need’ one. Each of us pays certain expenses and is responsible for our own cards and we update each other periodically. Plus, if someone got a hold of the information for one of us, we’d be a lot safer having our financial accounts split. I also recommend keeping only the money you need in your checking account and not allowing withdrawals from your savings with your debit card. If someone gets a hold of your debit card and pin (highly unlikely as it may be) they can only access what’s in your checking account.

    And as Victor pointed out, it makes gift giving so much easier when you have your own accounts!

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