Getting married is a big deal. Two lives are merging into one, with the goal of becoming complete partners for life. And when it comes to marriage, history, studies, and statistics all show that one of the most major reasons couples end up getting divorced or separated is due to problems or disagreements over their finances. So even though it's uncomfortable, managing finances after marriage is too big a deal to ignore. And trust us, whether there's one breadwinner or you both bring home the dough, you don't want to wait until after you've already married to start talking about how to manage your hard-earned money.
Thankfully, with a little bit of openness and honesty, you can ease into merging your financial lives successfully without it becoming a point of contention in your relationship. To that end, are our top tips for avoiding financial disaster after you marry the love of your life.
Agree on a Budget
Budgets are critical for financial planning. When it comes to managing finances after marriage, they're even more important. If you can't agree beforehand on what your budget should be every month and how it should be distributed, it's possible that you weren't as perfect for each other as you imagined. Since you'll soon be sharing everything (and I mean everything), not being able to agree on something this fundamental is sure to cause issues down the road.
Have the Conversation
This is the first and most important step, yet it's one that many couples miss. You need to have the conversation about what lifestyle you want to have, each of your spending habits, how much you spend on entertainment, dining, and other uses for disposable income, how much you try to put away every month, what you can afford, how much debt you each have, amounts in your accounts, and all the other details of your financial houses. If you marry someone who later drops the bombshell that they have $100k in personal credit card debt, or their credit score is sunken deeper than the Titanic, that can sink the relationship -- along with your new spouse's finances. This leads us to our next point.
Practice Total Transparency
This is the number one most important thing. Secret credit cards, unrevealed debts, hidden spending, and purchases you hide from your other half are going to affect the budget you already agreed upon. It's a trust issue if you're keeping secrets, and secrets about finances affect your spouse directly because they cut into their ability to plan financially.
If they haven't planned for your secret spending, the money they thought they were putting away for that down payment on a house or that crib for your incoming baby won't actually be there. You should both have your own money you can spend freely, but keeping secrets about your money and spending is a huge no-no.
Prepare to Compromise
Sorry to say it, but we have to be realistic: there will be disagreements at some point. Maybe even fights. Be ready to be a good listener, make compromises, and remember why you're here: because neither one of you is perfect, but you love each other, and you're mature enough to do what it takes to make your partnership one that lasts a lifetime.
Have an Emergency Fund
The average American has almost no cash stashed away for an emergency. Don't be like them! At some point a medical problem, car breakdown, or other situation will arise, and if you aren't ready with a robust enough emergency fund, you marriage as you know it could end -- not in divorce, but in homelessness. Saving money is no joke, so if it means you have to start going out to eat once a month instead of once a week, make this a priority. Besides, home-cooked meals you make for one another add a special dose of intimacy that restaurants can't compete with.
Review Early, Review Often
It's not exactly a fun aspect of marriage, but reviewing your budget and spending often is the best way to make sure you're both on the same page, and are reaching your financial goals. One great way to do this is by each saying where you'd like to be financially five years from now, and then making (or re-making) your plan around that. By doing so, you're always going to know where each of you stands, and you'll be able to plan ahead.
Think About Retirement
You just left the altar...isn't it a bit early to be thinking about retirement? Actually, no. The earlier you talk about your retirement goals (and how to reach them), the better off you'll be in terms of making sure you're really saving for the future.
Prepare to be the Sole Breadwinner
Whether or not you both have good-paying jobs when you first marry, your lives together will have ups and downs. Those can include expected firings and layoffs. Prepare emotionally ahead of time for the prospect of a time in the future when you might have to become the sole breadwinner and start supporting your spouse. If you don't, it can cause a lot more stress and fighting at a time when you'll need to support each other more than ever.
Buy Used, Refurbished, and Secondhand
From clothes to cars to computers, you can often get something that's as good as new (or close enough) for a massive discount. This isn't exactly specific to marriage, but it's a lifestyle choice you may want to consider adopting to save money. You won't have to skimp on quality, and you'll save a fortune in the long run. It also cuts down massively on waste and labor for products that are often produced in factories where pay is low and conditions are questionable at best (we're looking at you, electronics and clothes). That's just smart living!