How to manage finances in a marriage: A guide for newlyweds

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. Yet, the Thrivent 2023 Valentine's Day survey* found that fewer than 50% of Americans share financial priorities and decision-making with their partner. 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.

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 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.

The Thrivent survey found that lack of savings (35%), external factors such as inflation, job loss or a health condition (27%), and credit card debt and budgeting (22%) are among the biggest financial barriers for couples today.

Understanding each other's financial situation means sharing how much debt you have, including any monthly minimum payments and the kinds of interest rates you're paying. How much has each person has saved, either in savings, retirement or investment accounts? Finally, if past behavior or experiences have left you with particularly high or low credit, you should talk about it. Regardless of your financial past, celebrate how you'll move forward together.

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.

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 budget. This strategy can help families achieve goals like paying down particularly high-interest debt or saving for big purchases. Other couples may want to have a few guidelines and then just casually spend without a budget. Some key elements of budgeting to talk through together include these:

• 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.

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 college savings tool or retirement planning calculator.

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.

Debt is a fact of life for most families. Understanding the interest rates on your loans or credit cards can help you work as a couple to pay off high-interest debt. You can still prioritize making your minimum payments on time for lower-interest debt. If you know you want to apply for a home mortgage loan, for instance, you might need to work on your credit first. Researching how to boost your credit score and reduce your overall credit utilization can be a good way to plan for your future debts. Also, understanding how debt affects your tax situation; some interest on mortgage loans is tax-deductible. Talking over your debt and income situation with a financial advisor and a tax professional can help you to make a plan for how to manage debt in the coming years.

Much like savings, generosity is harder to fit into your financial life without a plan. Work together to discuss how you prefer to give back, whether it be through donations, volunteer hours or the use of your skills as part of a community. Make sure that part of your game plan involves keeping your passion for generosity and also discovering new ways to share your resources and talents together.

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.

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.

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 new insurance needs. Learning about and purchasing term life insurance or permanent life insurance, for instance, can help you feel secure about providing for your financial dependents. For auto and home insurance, you may want to revisit your insurance policies and get new quotes every few years. Even if you opt to stick with your current policies, you will be glad you gave it a fresh look.

Not sure how much life insurance you need? Try out our life insurance calculator.

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 local Thrivent financial advisor.