Our mindsets change when thoughts about "me" become plans for "we" after a wedding. Newlyweds get to enjoy the sweet aspects of combining households and getting to know each other's daily lives better. With those deeper intimacies, you'll also need to learn how to manage finances in a marriage.
As a married couple, it's wise to learn how your finances can be a tool to use together. You don't have to agree on every financial choice. However, getting to know each other's money mindsets, personal finance plans and future goals helps you work together and accomplish a lot.
These three conversations about money can help any couple start off on the right foot. The discussions get your past financial experiences out in the open, whether this is your first marriage or you are blending your existing families together and combining households. You don't even have to be newlyweds to make use of these conversations. Whether you're still dating or celebrating a 30th wedding anniversary, it's always a good time to align with each other about money.
1. Get to know each other's financial lives
How to manage finances in a marriage is relevant at many stages of life. It all starts with knowing where you both stand. If you sense differences, bring those to light. They can help you navigate compromising on shared choices.
Money truths that guide you
Money mindsets are the truths that guide how you think and feel about money, leading to how you spend and save. One example is the abundance mindset, which is associated with feeling that you are safe and have enough, helping you not make rash money choices. The opposite mindset, one of scarcity, can create feelings that you will never have enough money so you might as well spend it now.
Some potential mindsets beyond abundance and scarcity might include these:
- Money is something I don't talk about.
- Managing money is a great way to feel in control and plan for the future.
- Money is a source of stress.
Mindsets can motivate behavior that may not always serve us well. Talking about money truths with your spouse can be a valuable way to start understanding each other better. Use this knowledge to help each other feel safe and confident. Start off your conversation by discussing money truths that drive your own behavior. This self-reflection can be a good way to start aligning your values.
Most likely, you and your partner have had different priorities in the past. As a couple, you have the opportunity to prioritize what matters to you but also what matters to you both. For example, the more frugal person in the relationship might prioritize an occasional splurge together. The more casual spender can prioritize saving so that their frugal spouse feels more secure. You don't have to give up your own mindsets, but take your partner's mindset into account.
Credit, debt and nest egg snapshots
Understanding each other's financial situation means sharing how much
Before you got married, you had plans or goals for your money and how you wanted to spend your time and energy. These goals should matter to your spouse. After reviewing each other's financial picture, you have a great opportunity to share what you individually want to accomplish in both the next few years and beyond. Paying down debt, saving money and spending wisely all are easier to do when you're working toward specific goals.
2. Create a game plan
This second conversation gets into the nitty-gritty of putting together a joint financial life. This game plan is most helpful when you've either fully joined accounts or worked out an arrangement to share expenses in a different way. However, you can keep each person's income and choices separate. Joint or separate, it's still wise to know what the other person is doing financially. Everything from shared bills for your home to decisions about insurance should be discussed, even if you divide and conquer after you've talked.
Some couples choose to put every dollar into a particular category of spending, making a disciplined
- Who will keep a close eye on our accounts and make sure we're spending in a way that is sustainable given our income—you, me or both of us?
- Are there any frequent spending habits that we want to put limits on, such as a monthly amount allocated to entertainment or dining out?
- Are we trying to reduce how much we spend? If so, how do we want to do that?
These conversations prevent unpleasant surprises in each other's spending habits and help you avoid feeling controlled in your own spending. By creating a system you both are happy with, you each feel freedom and confidence.
Saving for shared goals
Decide from the beginning how savings will factor into your plans. If you don't plan ahead, it is easy to assume you'll save for big purchases later and delay the saving habit. A strategy for your savings plan, like automating savings or saving a particular percentage of income, helps you follow through.
Talk through when you'll boost your savings. For instance, do you want to contribute a percentage of any windfalls, raises or bonuses to savings every time? Deciding before it happens can help you make the decisions that align best with your values.
If you're not sure how much to save, think about the ends you want to achieve and work backward: If you want to save a certain amount for retirement or a child's college education, think through how much you'll need to save to get there using a
Combining insurance and retirement strategies
A perk of marriage is the option to save money on some expenses. From housing to taxes to insurance, you can review your options and select the best value for your dollar. It's wise to get all your insurance, retirement and other financial account information together for this conversation. Use these documents to have a discussion about where you could spend less and get all the coverage you need. Consider:
- Would combining multiple auto or home insurance policies into one bundled insurance policy save you money?
- Does one person's job offer a strong retirement plan match? Does it make sense to contribute up to the maximum employer match even if it means reducing contributions in other accounts?
- Does one person have benefits like health insurance that you want to use together? For instance, does your health insurance allow a self-employed spouse to join for less than a separate policy would cost?
These questions may help you save money, so also talk about how you might want to reallocate that money toward your goals once you achieve the savings.
Active debt management
Much like savings,
3. Use your finances to thrive
Your game plan is a valuable path through the choices you're making now. As the days turn into months and years, you'll see the benefits compound for responsible money management. Even after you have a firm footing, however, there are ways to make money work for you to achieve the goals and priorities that matter the most to you. We want to be part of helping you find those paths. Whether this conversation directly follows the other two or needs to come down the road in marriage, build these great next steps on your solid foundation.
Saving and investing to live your ideal life
While making a plan to save and contribute to retirement plans is a key step, there are more ways to make your money work for you over time. As a couple, research the options for investment accounts, individual retirement accounts (IRAs) and high-yield savings accounts in addition to your employer-sponsored retirement accounts. Over time, your savings can become a substantial diversified, growing portfolio. This wealth enables your retirement lifestyle, your ability to be generous to those in need and your ability to take exciting steps, like launching your own business or traveling extensively.
Periodically evaluating your insurance situation
Choosing an insurance policy doesn't have to be a one-time decision. As you and your spouse decide on everything from purchasing cars to having children, you may have
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Working with a financial advisor to expand your possibilities
A great financial advisor will hear out your money truths, your financial picture and your goals as individuals and as a couple. Then they can show you ways to move forward together with financial products that help you achieve a goal. If you feel like there are too many options for what to do with your money, don't worry. They can narrow your focus for your newlywed money conversations and start creating a concrete priorities list.
Joining lives and finances can be rewarding. Protect each other and plan for your future goals today by connecting with a