Getting Married? 5 Financial Considerations to Discuss With Your Partner First

About the author: Lamar Watson, CFP®, is a Fee-Only Financial Advisor in the Washington, D.C. area, that works with clients virtually across the country. Lamar's work with his clients focuses on budgeting, employee benefits, paying down debt, buying their first home, and investing. Lamar is the Founder of Dream Financial Planning, a virtual financial planning firm specifically designed to help young professionals and minorities take control of their finances and fulfill their dreams. Feel free to schedule a complimentary consultation to learn how we use the The DREAM Financial Planning Process ™ to help our clients achieve their goals. 

Between popping the question and saying “I do,” you and your partner have plenty to plan. And while it’s not as fun as cake tasting, you’ll want to sit down together and discuss the expectations you have about your future finances. According to a survey offered by Psychology Today, 27 percent of respondents found money to be the biggest stressor in their marriage.¹

Having hard, truthful discussions about money beforehand can help lay the foundation for an honest and open financial relationship later down the line. As you prepare to tie the knot, take these five financial considerations into account first.   

Consideration #1: Your Financial Influences

At this point, you’re likely familiar with what your partner’s childhood was like. But one aspect of their past you may have yet to discuss? How finances were handled in their household.

Were their parents frugal, coupon-clipping savers? Or maybe they splurged on dinners out and shopping trips every weekend? Now’s the time to dig deep into how your partner’s parents may have shaped the way they think about money. With all expectations out on the table, you can begin from the ground up determining together how your future family will be handling your finances. 

Consideration #2: Discuss Your Financial Triggers

Some people are stress-spenders, others spend when they’re bored. Many splurge when they feel social pressure to do so. Whatever it is that causes you to go over budget, it’s important to identify it and make your partner aware. Having your spouse as an accountability partner can really help both of you stay aware and on top of the poor spending habits either of you may have.

Consideration #3: Determine Joint or Separate Savings

One of the biggest financial decisions to make together is determining whether or not to combine your finances into a joint account, or keeping things separate. For example, if you both earn an income, you may decide to keep things separate in order to reserve your own discretionary income. On the other hand, you could find it useful to funnel a certain amount of your earnings into a joint account dedicated to paying off monthly bills like internet, a mortgage, car payments, etc. 

If you do choose to combine your finances, this will make it even more critical to sit down and discuss your spending/saving strategies with one another.

Consideration #4: Decide Who Does What

Does one of you cook and the other cleans? Maybe somebody makes the bed and the other takes out the trash. Just as you’ve developed a chore system between the two of you, you’ll want to determine who plays what financial role. If one of you is more interested in the market, they could decide to take the lead on your portfolios. If one of you is more organized than the other, they could be in charge of paying the monthly bills. Either way, you’ll want to sit down and draw out a list of any and all financial tasks before determining who should do what moving forward.

Consideration #5: Talk About Taxes

While we tend to only think about taxes one time a year, you may want to get a jump on determining how you plan on filing next year. As a married couple, you’ll have several options including married filing jointly, married filing separately, choosing a head of household, etc. You may want to meet with your accountant early on to determine which filing strategy may be best for you. This could potentially influence other aspects of your finances, which is why it may be a good idea to determine your strategy early on.

Getting married is an exciting time, and the days after you both say “I do” will feel like a whirlwind. Before you tie the knot, sit down with your partner and have a serious discussion about your finances as a family moving forward. Getting organized now could save you time and headaches later down the line.

Dream Financial Planning Process ™

Whether you're managing student loan debt, starting a business, or considering buying your first home, the DREAM Financial Planning Process™ is tailored to the unique needs of busy professionals is their 30s and 40s. This process focuses more on short-term goals while you grow and evolve in your personal and professional life. If you're looking for guidance on: Financial Planning, optimizing employee benefits, budgeting, student loans, and managing your 401k or investments we can help.

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With uncertainty surrounding the economic stability of our country, it's okay to have fears and anxieties surrounding your own savings and investments. The most productive course of action from here is to reach out to Dream Financial Planning (or whoever your trusted advisor might be) and discuss your options. It's easy to have knee-jerk reactions when it feels like the bottom is falling out, but it is imperative to make decisions using research-backed data and a level head. If you'd like a Complimentary Review and risk assessment of your investment portfolio feel free to send me an e-mail.

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On the first Thursday of every month I send out a monthly newsletter with tips and tricks to help you manage your Finances. In the July Newsletter I shared an article that discusses Regulation Best Interest vs. the Fiduciary Standard. I also included two downloadable PDFs. One highlights how to make sure your Health Savings Account (HSA) distributions are tax-free. The other provides guidance on if you should contribute to a Roth or Traditional IRA.

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