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5 Things to Consider When Combining Finances Before Marriage

Closeup of two wedding bands on top of a stack of money

The phrase “marital bliss” evokes many things, but financial planning isn’t usually one of them. It may not be as exciting as planning a honeymoon but making a plan for combining finances before marriage is crucial to building a strong foundation for a healthy union. For many couples, this isn’t always an easy task. That’s because many people grow up with feelings of shame and secrecy surrounding money. Of course, it doesn’t have to be that way! Start your marriage off on the right foot by engaging in an honest conversation about money. Below are five simple steps to help you get started.

1. Put everything on the table
It’s hard to combine finances when one or both partners in a relationship hold back information about their debt, income, and money habits. Ideally, couples will take the time to unpack the nitty-gritty details of one another’s financial picture. That means credit scores, outstanding balances, and average income-to-spending ratios.

And while nerding out over the accounting details will go a long way toward nailing down a financial plan that works for both parties, it’s important to consider big-picture attitudes toward spending too. What are your partner’s money pet peeves? What’s their overall philosophy regarding money management? Agree to ask these questions with an open mind, avoiding judgmental or shaming language. Making your partner feel safe opens the door to a relationship built on honest and transparent communication.

2. Identify your ideal bank setup
A lot of people assume that getting married automatically means combining bank accounts. And while some will go as far as to say not sharing a bank account can lead to divorce, younger generations are ushering in a more flexible, multifaceted approach. You and your beloved have three options for how you choose to tackle joint banking: go all in, find some middle ground, or continue to keep things separate.

By going all in, you and your future spouse are agreeing to combine all assets and liabilities into one account under both of your names. This approach supports transparency and accountability, but some may feel it can lead to controlling behavior and a lack of privacy regarding certain purchases. On the other end of the spectrum, keeping things separate can have the opposite effect: a lack of accountability and the possibility of getting off track with shared goals. To successfully navigate the separate accounts approach, couples must be willing to communicate clearly and coordinate effectively when it comes to big purchases and recurring expenses. For many couples, a Goldilocks approach in which both parties maintain their own bank accounts while funneling the majority of their income into a joint account offers the right balance of control and accountability.

3. Discuss shared financial goals
First comes love, then comes marriage, then comes… a mortgage payment? This might come as a shock to those who harbor a more traditional idea of what it means to get married, but not everyone wants to own a home. There are many sound arguments for and against homeownership that we won’t go into here. The important thing is to make sure that you and your betrothed are on the same page about your priorities in terms of assets and ownership—which extends beyond tangible things like buying a home or a car. For example, do you and your partner plan on raising children someday? If so, it’s important to align on how that will influence big-picture financial planning—i.e., saving for college and extracurricular expenses.

4. Consider a prenup
Prenuptial agreements can be a sticky topic to navigate. For some people, prenups are indicative of a lack of trust and faith in the future of the relationship. For others, they offer peace of mind in the event the unthinkable happens—especially if they’ve already been through the painstaking process of untangling their finances with a former spouse. Common wisdom used to dictate that prenups were the realm of the wealthy, but things have changed in recent years. Formerly a strategy for preservation of wealth, many millennial couples are opting for prenups in an effort to protect intellectual property. After all, we are living in an economy of entrepreneurship, ideas, and innovation.

Whether a prenup is right for you and your partner-to-be is fully dependent on your shared approach to finances. As with most topics related to joint finances, the important thing is that you talk about it and tackle it from the same perspective.

5. Make a budget
If you’ve made it to the fifth consideration for combining finances before marriage, congratulations! The hardest parts are behind you. With your perspectives aligned on money management, combined banking, financial goals, and your contractual agreement of ownership should things go south, you and your beloved are ready to put what you’ve learned into practice by making a financial roadmap. Follow our tips for making a monthly budget, start saving for the big day, and enjoy your happily ever after.

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