Marriage is an exciting merging of two lives — your respective interests, lifestyles, outlooks and approach to finances. As you plan your future together, taking time to openly discuss finances can help you start off with a strong foundation. Open communication is especially important if you are marrying later in life or remarrying, as you and your partner may be bringing to the union more significant assets, established retirement accounts or financial responsibilities, such as child support or alimony.
Use this checklist of questions to help guide you through conversations about your financial backgrounds, habits and values.
Your finances as individuals
Openly discussing your respective personal financial circumstances can help you effectively address various topics.
Current financial situation
Consider sharing and discussing details about key areas of personal finance, including:
- Debt – Unpaid loans, credit card balances, etc.
- Assets – Property ownership, investment vehicles, trust funds, etc.
- Income – Monthly income, bonuses, side job earnings, etc.
- Financial responsibilities – Commitments from a previous marriage or relationship, such as child support or alimony
While you may have a general sense of your partner’s spending habits, it’s beneficial to understand what drives each other’s financial decisions. These insights can equip you to openly discuss any differences in your approach to money. Ask each other about:
- Money management style. Are you a spender or a saver? Do you track every expense or monitor your accounts at a higher level? Share what causes you financial stress and areas where you’re more relaxed.
- Financial background. Growing up, did money cause tension in your family? Were finances discussed openly? If you were married before, what were the financial stumbling blocks in your previous union, if any? Questions like these will help you both understand the factors that may influence your financial mindset.
- Spending values. How do your values influence your spending habits? If health is a priority, then an expensive gym membership may be essential for you. If experiences are important, you may spend extra money on dining at nice restaurants, taking trips or attending concerts.
- Previous financial mistakes. Talk openly about financial mistakes you may have made in the past. Share what happened and why and resist the urge to judge each other’s missteps.
Your individual financial goals
You’ve each formed your own goals and priorities as you’ve created your independent financial lives. Take time to discuss your perspectives on financial goals, such as:
- Saving for retirement
- Reducing debt
- Owning a home (or second home)
- Investing in education for children or grandchildren
- Saving for a trip or other major purchases
- Giving to charitable organizations
Your finances as a partnership
With insight into each other’s financial backgrounds, habits and hopes, you can start planning your financial future together. If you’d like a neutral person to help guide you through these financial conversations, let’s meet. We have experience helping couples find an approach to finances that works for both people.
Your shared financial goals and priorities
Look at your individual goals and find areas of overlap as well as divergence. Maybe one of you prioritizes purchasing a bigger home, while the other wants to invest in education for children or grandchildren. Perhaps both of you want to leave a legacy but aren’t sure how to navigate the complexities of your new blended family. We can help you explore financial solutions that work toward your individual and shared priorities.
How to handle your accounts
Based on your financial situation, you may want to consider combining some or all of your financial accounts. We can review your finances together to help you decide where your partnership can benefit financially from merging accounts or keeping things separate.
Consider creating a prenuptial agreement
A prenuptial agreement legally determines how assets will be divided and protected in the event of a divorce or the death of you or your partner. While it can be an uncomfortable topic to discuss, consult with an attorney to determine whether you should have this legal agreement. In general, you may be advised to sign one if you or your partner have:
- Vastly different assets
- Substantial debt
- Disparate incomes
- Businesses you own separately
From a financial perspective, we can work together to help you evaluate how to protect your separate assets. Using this information, you can partner with an attorney to create a legal agreement that fits your unique situation and financial needs.
Make the most of your future marital status by preparing to wisely navigate tax laws. Understanding the tax rules is especially important if you’re marrying later in life or remarrying.
A tax professional can help you understand the tax implications of your union. One consideration is how to file your taxes. Filing your taxes jointly can offer tax advantages like being able to combine deductions. On the other hand, your union might push you into a higher tax bracket.
It’s also beneficial to consider how your investments may be taxed. Together, we can review the tax treatments for your individual investments and develop a strategy that helps diversify your assets as a couple between tax-deferred, tax-free and taxable.
Day-to-day money management
Some couples designate one spouse to manage the budget, while others may share responsibilities for keeping records and paying the bills. Whatever your approach, ensure you’re both aligned. Consider setting up touchpoints to keep each other informed and storing important financial documents somewhere you both can easily access. You may want to think about setting spending thresholds, where you agree that purchases over a specific dollar amount – for example $500 – will be discussed first.
Building a strong financial foundation
Talking about your finances before marriage may not always be easy, but it is beneficial. We can guide you through the process by helping ensure your conversations are informed, collaborative and forward-thinking. Working together, you’ll be able to build a solid financial foundation that can strengthen your relationship — and your future.