How to Manage Money as a Couple

By Britt Erica Tunick

Wedding season is in full force, and even more so than usual, following a year of social distancing that forced many couples to delay wedding ceremonies. If a wedding is in your near future, you probably have your big day planned by now, but have you taken the time to plan out how you and your soon-to-be spouse will approach collectively managing your finances? Like it or not, divorce is a reality that many married couples eventually face and arguments over money are the second leading cause for failed marriages. To avoid marital money issues, now is the time to sit down and determine how you and your future spouse will approach money management as a couple.

Getting married and living together means collective expenses, from rent or mortgage payments, to utilities, grocery bills, insurance payments, credit card debt and many other unforeseen expenses. Add children into the equation and money management becomes even more complicated. While it may be uncomfortable to discuss finances with your fiancé, doing so is a necessity for a healthy relationship. Following are just a few things to consider when it comes to discussing and mapping out how you will handle your finances as a couple once you are married:

• Full disclosure is important regarding finances. You and your partner should sit down and discuss everything from what kind of savings and assets you are each bringing into your marriage, to any debt that either of you have from student loans, credit card bills, or car payments. Failing to disclose significant debt to your partner can lead to significant resentment down the road, as any debt or negative credit rating held by one partner can have a detrimental impact on mortgage rates or other types of loans taken out together.

• Sitting down with a financial planner may sound intimidating, but meeting with an unbiased third party to discuss your finances and map out your best route for managing your collective finances can be a good idea and help make such conversations more matter of fact and a bit less uncomfortable.

• Determine whether you plan to maintain separate finances, or hold assets jointly, or if you will take a hybrid approach and then map out how this will work. If both partners are working, and the plan is to keep your finances at least semi-separate, consider what would be a fair split of your joint expenses, especially if one person makes significantly more than the other. Similarly, determine how much you are looking to save together as a couple for long-term or big expenses, from the purchase of a house to retirement, and how much of your incomes will be kept for yourselves to do with as you please.

• While couples traditionally shared all of their finances, that isn’t always the case anymore, as people get married later in life, and come into relationships having already amassed significant assets of their own. Consider whether or not you want a prenuptial agreement to protect the assets each of you bring into your marriage in case things don’t work out for the long-term.

• Identify both your short-term and long-term goals as a couple and then set a budget that will help you work toward meeting those goals. Having a budget in black and white from the outset can make it easier to address conversations about finances. It is also important to determine who will handle managing your day-to-day finances as a couple, such as paying the bills and tracking your budget and financial goals. Dividing up such responsibilities in a clear manner in advance can help to avoid misunderstandings, headaches, and arguments down the road.