It’s no secret that money arguments are one of the top predictors of divorce. Yet according to a 2019 SunTrust survey, only 51% of couples discuss finances before marriage. Even more surprisingly, only 41% of couples disclose their annual salaries, and only 36% bring up debt.
If you’re in one of these couples, you may be avoiding the discussion out of fear that financial difficulties could derail your wedding plans. However, merging lives also means merging finances, and if you can’t bring up money with your partner now, it won’t get any easier later. The more you put off difficult conversations, the harder they become. And failing to discuss such core life topics could be an indicator of you’ll handle things as a couple in the future – with a lack of communication.
If you’ve been avoiding having the money talk with your partner, here are some ways you can get started and begin your lives together on the right track.
It’s Never Too Early to Talk About Money
Experts agree: The sooner you start having hard conversations with your partner, the better off you’ll be. You don’t necessarily need to swap credit scores on the first date, but as soon as you start seeing yourself with this person in the long run, it’s time to have some money conversations. As David Bach, author of “Smart Couples Finish Rich,” tells CNBC, “You want to know that your life aspirations and your partner’s are going in the same direction.”
And there’s no need to start worrying if you discover that you think about and handle money in different ways. Bach tells CNBC that “[t]wo people who are very different financially can still work out together, but you’ve got to make it a goal to be on the same page financially, and sooner is better than later.” A marriage is a merging of two lives into one. Although you will – and should – hang on to some of your own goals and interests, once you’re married, you’ll be creating a life together. You’ll work toward most of your big dreams and goals – kids, houses, retirement – together, and all involve money.
Like it or not, money is at the core of your ability to build the life of your dreams, and financial compatibility will play a huge role in the success of your relationship. Not only do you need to regularly and consistently talk about money, but you also need to get on the same page about what your shared dreams and goals are and how you’ll work together to meet them.
It’s far better to do this before tying the knot than to find out after marriage that you’re working toward opposing goals or don’t share the same values. For example, a guest called in on an episode of the popular podcast So Money with Farnoosh Torabi to ask for advice after discovering her husband had racked up $65,000 worth of debt – unbeknownst to her – while she’d been working hard to save $20,000 toward a down payment on a house. As you can imagine, the debt was at total cross-purposes to the home purchase and, even with the wife’s savings, they were still $45,000 in the hole.
Although this example may be extreme, it demonstrates how vital it is to come together as a team to achieve your financial goals. It’s only by working together that you can make them happen and build the kind of life you dream of.
Money Conversations to Have With Your Partner
Most people don’t enjoy talking about money. It’s not exactly “sexy,” and if you’re newly engaged, it’s far more exciting to talk about wedding and honeymoon plans. Unfortunately, there’s a reason money causes such tension in relationships. If you table these kinds of conversations for later, you’ll be talking about them after the fact once money has become a sore spot.
Being proactive about discussing your finances pays off. It helps you come together to mutually work to achieve your goals, rather than resorting to arguing about money only after something happens.
Use the questions below to get the conversation going.
1. How Do You Deal With Money?
Ideally, you’ll already have figured out a few things about how your partner handles money long before you pop this question. What kinds of dates you like to go on, who generally picks up the check, and how you splurge – or don’t splurge – on each other should be good indicators of how each of you thinks about money and how things will continue after you get married. For example, do you like to indulge in fancy restaurant meals or keep your dates cheap and simple? What are your shared values about how you both enjoy spending money, and how are they different?
If you’re in the early stages of a relationship with someone you want to build a future with, now’s the time to have small, bite-sized financial conversations you can build on later when things get serious. That way, when the conversation is no longer about a date, but about your wedding, a car, or a house, you’ll already have set the groundwork for talking about these things.
2. How Did Your Families Handle Money?
Everyone has deep-rooted feelings about money – both positive and negative – formed by a combination of their past experiences and how their families handled money. That’s part of what makes money so hard; it’s not that we can’t figure out the ins and outs of how to manage it, but that we have so many emotional attachments to it.
Figuring out you and your partner’s attachments begins with your “money stories.” How did each of your families handle money? How did they talk about money? Did your parents argue about it? Was money plentiful or scarce? What did you learn from your parents about money that was or wasn’t useful? Discussing these things can help you uncover why you feel the way you do about money.
3. What Are Your Money Fears?
Once you have each other’s money stories, you can start to understand one another’s money fears and values. For example, if your partner grew up poor or went through a period of financial scarcity, such as a parent’s job loss, they might have a lot of fears about money and, therefore, a need to hang onto as much as possible to feel a sense of security.
4. What Are Your Money Values?
It’s important to understand each other’s money values before you discuss goals and budgets because how you value money – in other words, what you think money is “for” – will inform these discussions. For example, does your partner think money is for security and try to stash away every nickel and dime? Or do they think money is for happiness and spend it more freely on the here and now?
It’s also important to understand that how we spend money may not always line up with our values. For example, I made a lot of financial mistakes early on because I valued the freedom money could provide. Unfortunately, I used non-existent money in the form of debt to fuel a lot of those choices, and as a result, I ended up creating the opposite of freedom. I didn’t see that until later when the debt became too burdensome and it was too late to do much about it. Had I invested more of my money and not relied so heavily on credit, balancing “now” with “later,” I would have created far more freedom for myself.
When you start talking with your partner about how to create a life of security, happiness, and freedom with your money, don’t discuss only the specifics of budgeting, saving, and investing. Also examine if you’re actually using your money in alignment with your values.
5. What Kinds of Debts & Resources Are You Bringing Into the Marriage?
If you and your partner don’t know each other’s money situation, you’ll have a tough time planning for your future. It’s critical that you talk about where you each stand financially.
This is when you go over all of your basic details, including:
- How much does each of you make?
- What do you each owe (credit cards, student loans, car loans, and so on)?
- How much does each of you have in savings and investments?
- How often, and how much, do you regularly contribute to savings and investments?
What you’re talking about are each other’s assets and liabilities. You can’t make a budget or plan for future goals, such as buying a house, without knowing these basics.
Be careful to leave judgment at the door. If you’re serious about making a life together, you need to figure out how to work as a team to meet your mutual goals while also loving and supporting one another.
Bear in mind that bringing debt into a marriage is common, especially among millennials, who may be strapped with a large amount of student loan debt. According to the 2017 Money, Marriage, and Communication study by Ramsey Solutions, 86% percent of couples who got married in the last five years started with debt. If you’re in one of those couples, you’re not alone. It’s still vital to disclose it, however, as 48% of couples who fight about money argue about debt, according to the survey. Further, once you’re fully transparent with your spouse, the two of you can work together on tackling the debt far better than you can alone.
When disclosing your current income, also discuss where you each see yourselves going in the future. What level of income are you trying to achieve? Will reaching it require more education and perhaps more student loans? Will it mean working 80 hours per week for decades? Understanding both your current and future income aspirations will help you plan a life together that works for both of you.
If this is a second marriage, other things to consider include whether you have child support or alimony payments. Are either of you partially or fully responsible for the care of a child, children, or elderly parents? What expenses are involved in their care? If you have elderly parents who might soon need care and may not have planned well for themselves, discuss how you’ll deal with the situation together. Caring for aging parents can be a long-term and potentially expensive situation, and you should have a plan in place for if and when it happens.
6. What Are Your Credit Scores?
Your credit score may be one of the most vital numbers you share when it comes to planning for your future. Where you each stand can affect your ability to buy a car, lease an apartment, buy a house, or any number of other situations involving a credit check. If either of you is unaware of your credit score, you can check it easily at Credit Karma.
If one of you has a low score, and you plan to buy a house someday, work together to increase that credit score. It may take some time, but when you tackle these situations as a team, you’ll not only reach your goals more effectively, but you’ll also create a stronger bond as a couple.
Whatever you do, don’t wait until you need a good score to find out your partner doesn’t have one. Credit scores will come to light eventually, so it’s better to tackle the issue before it really matters and potentially cripples your plans together. Research by the Federal Reserve Board found that the higher your credit score is when your relationship begins, the less likely you are to break up after the first few years.
Pro Tip: You can sign up for a free Experian Boost account and start improving your credit score almost immediately.
7. How Will You Merge Your Money?
No matter how financially independent you were before marriage, merging your lives includes merging your money. It’s essential that you come to think of your money as a shared resource rather than “mine” vs. “yours.” Otherwise, you’ll have a difficult time working together to reach mutual goals. Moreover, without some method of sharing money for things like food, bills, child care, and entertainment, one or both of you are likely to feel resentful about spending “their” money on a shared expense.
That doesn’t mean every couple needs to have a joint checking account. While 76% percent of couples have a shared account, according to a 2016 TD Bank survey, The Atlantic reports that more and more young couples are opting out of joint accounts. There isn’t one “right” option for everyone; the important thing is finding a solution that works best for you. Communication is key. And no matter which option you choose, remember that your resources are for the good of the marriage. Otherwise, you might as well be living separate lives.
If you have physical property or investment and retirement assets, also discuss if and how you will merge these. For example, whose sofa will you keep? If you both own houses, which will you keep? Will you leave property or accounts in individual names or will they be held jointly? Deciding these things now will help prevent misunderstandings and conflict down the road.
8. How Can You Each Maintain Some Money Independence?
Even if you decide to merge all your money into one account, it’s important to feel as though you have some freedom and flexibility over small purchases. It can feel too constraining to have to account to your spouse for every dollar you spend.
Discuss how you will deal with personal spending. Many couples set a dollar limit on purchases that need to be discussed jointly, such as anything over $100. Other couples opt for a joint account to pay shared expenses and individual accounts for personal spending money. That way, anything you spend out of your personal accounts doesn’t need to be discussed – or become grounds for argument. That’s what my husband and I do. We have a joint account for all household expenses and separate accounts for personal spending. We decide on a set limit to give each other for our personal accounts, we allocate the rest of our money for bills and savings.
9. How Will You Divide Financial Responsibilities?
In my marriage, I’m the one who loves drafting up budgets, comparison-shopping for the best deals, running savings calculators, and geeking out over compound interest rates. My husband prefers to be told what he can spend and when. We used to fight about dividing up everything equally among us, but eventually, we figured out it was easier to have me manage our family finances.
That doesn’t mean we don’t talk about our finances. It’s important to always keep the lines of communication open, including regularly discussing decision-making, budgeting, and financial dreams and goals. After all, the Marriage, Money, and Communication study found that 94% of couples who regularly talk about money claim their marriages are “great.” But even though you should keep talking about money – and make sure you each know where all the money is and know each other’s essential passwords in case the worst should happen – it may make the most sense to have one of you be the general money manager.
Or, you might decide to divide duties some other way. The important thing is to discuss your finances and make money decisions together. Otherwise, there’s too much potential for assumptions and differing expectations to lead to serious arguments.
10. What Are Your Life Goals?
What kind of life do you want to build together? Do you want to buy a house? Have kids? Travel, either now or in the future? Talk in depth about your mutual hopes and dreams and find out if you have the same vision for your lives.
Perhaps more than any other question listed here, this is one you don’t want to avoid before marriage. Marriage is about merging two lives into one united team. Sure, you’re getting married because you love each other, but if you have very different plans for your lives – for example, one of you really wants kids but the other is dead-set against it – you’ll need to think long and hard about whether merging your lives is the best idea. That doesn’t mean that all your goals have to align, but at some point, you’re going to have to figure out if you’re compatible on the big ones and how to come together on the smaller ones.
Rather than diving headfirst into this question, consider spending some time individually writing down all your goals for one year from now, five years from now, and so on. Then, come together and compare. Again, if your goals aren’t all mutual, don’t despair. You simply have to work together to decide what your shared goals should be and how to support each other in achieving the personal goals that are important to one of you, such as going back to school.
11. How Will You Work Together to Meet Your Goals?
Many of our life goals – buying a house, having kids, taking annual vacations – require money. So, how will you get that money? How much will you save for retirement? For a house? How will you manage the cost of having kids? How much is each of you willing to sacrifice in the short term to make your long-term dreams come true?
Say, for example, that you’ve always dreamed of owning a home, and you plan to buy one in the next five years. You may be fine making sacrifices such as taking fewer vacations or buying a used car to save up for a down payment, but is your partner? If your partner is the one with the big goals, such as starting their own business, are you OK making sacrifices to help them achieve these goals?
Whatever your goals are, you need to work together to make a plan to achieve them. Without a plan, these goals will remain out of reach.
12. How Will You Budget Your Money?
After you’ve worked out an overall plan for reaching your goals, it’s time to sit down and work out a monthly budget. Take into consideration your current income, how often you’re each paid, and whether it’s consistent or irregular pay and what you can reasonably count on making each month. Then, work out your expenses.
Some expenses, such as your rent and car payment, may be fixed, while others such as your utilities and groceries may fluctuate from one month to the next. Also, you may have some months with additional expenses, such as car maintenance and repairs or holiday gifting.
Talk about what you both want your monthly budget to look like, how much you should be spending in each category, and how much you’ll have left over to put toward your financial goals. Although you may not be married yet, it’s not too soon to start discussing how you’ll manage everything once you are. If you’re already living together, you may already have had some of these conversations. The Brides 2018 American Wedding Study found that as many as 84% of couples live together before marriage.
Working together, you can create a budget that fits your income and allows you to enjoy spending some of your money while also working toward your goals.
13. Whose Insurance Should You Be On?
Once you’re married, you’ll have the opportunity to enroll in health care coverage outside of the annual enrollment period. This “life event” allows you and your partner the option to join one or the other’s health insurance plan.
Sit down and compare plans. Which of you has the medical plan with the best coverage for the least possible expense? Does it make more sense to continue carrying two individual policies or have one spousal policy? Some insurance carriers differentiate levels between individual, spousal, and family. The higher your level of coverage, the higher your premium will be, but it may still be less than carrying two separate plans.
While you’re on the insurance topic, you’re both going to want to look into getting life insurance policies. You can sign up in as little as five minutes with Bestow; plans start at just $5 per month.
14. How Much Will You Spend on the Wedding?
The cost of the average wedding, according to the Brides survey, is upwards of $44,000. And while 42% of couples’ weddings are completely paid for by their parents, 58% contribute at least in part to the total cost of their nuptials.
Many couples simply can’t afford this kind of wedding without going into debt. Yet the Money, Marriage, and Communication study reported that 41% of couples felt pressured to pay for more wedding than they could afford, and more than half (54%) of those married within the last five years paid for at least some of their wedding expenses with a credit card. Perhaps more importantly, 73% of those couples say they regret that decision. Since 86% of couples enter into marriage with debt, planning for your future together means thinking hard about whether it makes sense to take on any more.
If you feel the pressure to go into debt to impress your guests – or even yourself – with a lavish wedding, it’s worth considering whether you’ll still be happy with having made that choice 10 years down the road when you’re still paying the credit card bill. Also consider that if you need to use credit to finance your wedding, you could end up paying as much as three times the original cost if you can’t immediately pay off the balance. So make sure to ask each other if you’re comfortable taking on debt for a pricey dream wedding. Bear in mind that research has found that cheaper weddings often lead to happier marriages.
Even if you don’t need to take on debt, there could still be an opportunity cost in paying for an expensive wedding. What else could you do with that money that might be more valuable to you? Put a down payment on a house? Contribute to an earlier retirement?
Getting married is an exciting time for all couples, but there are plenty of ways to have the wedding of your dreams without breaking the bank. Although it’s been nearly a decade since my husband and I were married, we were able to pull off my dream wedding in a botanical garden for $5,000 by opting for budget options on things like flowers and my dress and DIYing our wedding invitations, programs, and decorations.
Ultimately, it’s up to you both to decide how much you feel it’s worth spending on your special day, but know that it’s possible to have a beautiful wedding without crippling your financial future.
15. Do You Want Kids?
Whether or not you both want kids is not only a major life decision for every couple, but also a financial one. According to 2015 calculations by the U. S. Department of Agriculture (USDA), it will cost parents an average of $233,610 to raise a child from birth through the age of 17. That’s an average of $1,145 per month added to the family budget for each child.
The costs of child-rearing vary by age, location, and socioeconomic status. For example, the USDA calculates that higher-income families can expect to spend an average of $372,210 on each child. For a more precise calculation based on your situation, check out this USDA calculator. Bear in mind that the USDA projection doesn’t include the cost of additional expenses such as college tuition.
That said, few parents are deterred by the costs as the decision to become a parent is rarely a financial one. But you still need to prepare financially for kids if you have your hearts set on becoming parents.
Fertility Treatment & Adoption
Getting pregnant isn’t easy for some couples. Trying to conceive can be an exhausting and stressful process that takes months or even years. Even though you may have your ideal family size and timing in mind, you should discuss what you’ll do if things don’t go according to plan.
If you run into fertility issues, many insurance plans don’t cover infertility treatments, and depending on the types you may need, it could end up costing you tens of thousands of dollars to have a baby. Are you both willing to spend this should you be unable to conceive naturally?
Alternatively, would you be interested in adoption? If so, will you adopt a baby or an older child? Adoption can also be an expensive undertaking. As of 2018, it costs an average of $40,000 to adopt a baby in the United States, according to Adoptive Families.
Having kids is a major life undertaking that can carry with it some rather intense emotions, so it’s best to find out now what your partner thinks about all this so you’ll be better prepared to make some difficult decisions if need be.
Child Care & Work
You should also decide how you’ll deal with child care and careers. Will one of you be a stay-at-home-parent? If that’s the case, and you plan to have kids within the next few years, you should attempt living on one income now and sock the rest away in savings.
Further, if one spouse plans to stay home, you’ll need to think about how much life insurance you’ll need to protect the non-working spouse and kids should the worst happen to the working spouse. You’ll want a policy on the stay-at-home spouse too as “replacing” them will require hiring a nanny or putting the kids in full-time day care.
If you’ll opt for child care instead, you need to consider how you’ll prepare for that. According to a 2018 Care.com survey, child care has become unaffordable for as many as 70% of Americans. Although costs vary from one facility to another, CNBC has compiled a list of average child care costs in each state as of 2018.
Other considerations include how you’ll manage pickups, drop-offs, sick days, school holidays, and closings. Will one spouse’s career take priority over the other’s, or will you take turns taking time off to protect both careers?
Do you believe your kids should grow up in a certain kind of neighborhood with a certain level of schools? Will they attend public school or private school? Will you insist on college? Will you pay for it, or will you expect your kids to put themselves through school? If you’ll pay, will you invest in a 529 through a company like CollegeBacker? How much will you need to put away every month?
You certainly don’t have to have all of these questions figured out now, but as you can see, financial conversations about kids can get complicated, and answers to all these questions will have impacts on the family budget. So it’s a good idea to start the conversation now and keep it going as you get closer to some of the applicable milestones.
16. How Will You Spend Your Golden Years?
Though it may seem far away, it’s not too soon to plan for your retirement. The power of compound interest means the sooner you start investing, the less you’ll need to put away to reach your goals. Conversely, the longer you wait, the more you’ll have to pull out of your budget to secure your financial future. What you want your retirement years to look like has a lot to do with how you currently spend and save your money, even if your retirement is still 30 or more years away.
A 2018 Fidelity survey found that many couples nearing retirement age aren’t on the same page about their plans. A third of the respondents didn’t know or couldn’t agree on where they wanted to retire, a third didn’t know how “comfortable” they wanted their retirement years to be, and up to two-thirds didn’t know at what age they wanted to retire.
While you need to talk dollars and cents as it impacts how much you’ll put into your retirement accounts, you should also talk about the kind of lifestyle you want to live in your golden years. Think about what you want your ideal retirement to look like. For example, maybe you want to travel around the world, buy a second home near your children and grandchildren, or downsize and move somewhere warm and sunny. Though your plans will likely change as the years march on, talking about them now will help you financially plan for your future together, as well as help ensure you’re both on the same page.
17. How Will You Plan for the Worst?
And now for perhaps the least sexy financial planning topic: How you will prepare for the death of one or the other of you. If the worst happens, you’ll want to make sure the surviving spouse is financially protected as much as possible.
Once you merge lives and finances, the future you build together will become mutually dependent. If you’re relatively young – in your 20s or 30s – and have no minor children, you may not need life insurance to cover the deceased spouse’s missing income. But if you’re in any way dependent on your spouse’s income or have minor children to provide for, life insurance is worth considering.
If you’re getting married at an older age and have accumulated significant assets, consider how you’ll pass those assets on to either your surviving spouse or any children. Regardless of your age, make sure you have advance directives in place. These include a living will, a durable power of attorney for finances, and a durable power of attorney for health care. Should you become incapacitated, these documents will either speak on your behalf or authorize the person of your choosing, most likely your spouse, to act on your behalf.
As you age, your end-of-life planning needs will change, so be sure to revisit this conversation regularly. In the meantime, you need to have at least an initial conversation about what should happen if the unthinkable occurs.
Pro Tip: Don’t procrastinate when it comes to life planning. Companies like Trust & Will make the process simple. You can create a customized estate plan in just 10 minutes.
Keep the Conversation Going
Talking about money can be difficult. But it’s vital to the lifelong health of your relationship to talk regularly about your finances. You can’t simply have the money talk once and be done with it, if for no other reason than that your lives together will continually shift and, along with them, so will your finances.
One way to keep the money conversation going is to schedule monthly or quarterly “money dates” where you openly talk about the current state of your finances, goals, and budget. Keep in mind that because talking about money can lead to fights, you don’t want to bring up a conversation about the credit card bill after someone’s had a long day. It’s better to set aside a time when you’re both ready and prepared to talk money and nothing else.
Also remember that the more proactive you can be, the better. Too many couples talk about money only when there’s something to worry or argue about, such as not having enough money to pay for an unexpected expense. That only serves to reinforce money conversations as difficult and stressful. So talk about your budget and your goals before something becomes a sore point, and always remember that you’re a team; refrain from judging or accusing and work together to find mutually acceptable solutions.
Consider reframing the money conversation entirely. Instead of thinking about money in terms of problems that need to be solved, think instead about planning all the wonderful things you have to look forward to, such as having kids, or the things you plan to do together, such as take a trip to Hawaii. That way, money feels less like a scarce resource than a tool you use to create your ideal lives.
This may seem like a daunting list, but you don’t need to have all these conversations at once. The point is to get on the same page as much as possible about your finances and your goals before you tie the knot so you’ll be in the best possible position to start creating your lives together. Further, addressing potential points of argument before you get hitched, and being aware of what you each bring to the relationship financially, will help you work better as a married couple.
A 2014 Money survey found that 70% of couples fight about money more than any other topic, including “household chores, togetherness, sex, snoring, and what’s for dinner.” But you don’t have to be a statistic. Coming together as a united financial front starts with one simple thing: a conversation. No matter what stage you’re at in your relationship, even if you’ve been married 10 or 50 years, it’s never too late – or too soon – to start having conversations about money.
And if any of these conversations become too difficult to have on your own, you can always head to a financial planner. A financial professional, which you can find through SmartAsset, can help you create a plan as well as act as an objective third party.
Have you recently gotten engaged? Congratulations! Have you started any of these money conversations, or are you planning to soon?