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Sandra L. Bragar, CFP(R), Aspiriant’s Managing Director of Planning, Strategy, and Research.
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For better or worse, for richer or poorer, married couples generally promise to hold one other for better or worse. So most couples are aware that before walking down the aisle, they should address their existing financial situation.
However, it’s easy to ignore the wider picture, which will influence their financial partnership for years to come, including lifestyle preferences, fairness and equity, commitments and moral responsibilities, and more. If you’re planning a wedding, here are three important financial questions you should ask and answer before the big day:
1. What is your financial backstory?
Everyone’s financial connection is molded by their life experiences and relationships. Some people were raised with a lot of money and were told not to talk about it. Others have built their lives from the ground up and place a high emphasis on hard effort. Some people are frugal bargain seekers regardless of their wealth, while others prefer living lavishly. Extended family expectations and obligations may play a dominant role in your shared lifestyle in some circumstances.
It’s critical to chat with your partner about your money principles, history, and general attitudes — your money scripts — and figure out where you share similar viewpoints and where you might have roadblocks to overcome. You don’t have to solve all of your problems before getting married. However, identifying where work needs to be done and committing to finding common ground are critical to avoiding future disagreements over money issues big and small.
2. What financial goals do you have for the marriage?
The job assumptions are frequently shaped by the money scripts. When expectations aren’t satisfied, most people experience anger, resentment, and melancholy, which aren’t conducive to a successful marriage.
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As a result, it’s critical to establish clear expectations for day-to-day responsibilities and decision-making early on. For example, who will be the primary breadwinner, and if children are expected in the future, who would be expected to take time off work when the children are sick? How will you make spending, saving, and investment decisions? How will you deal with fluctuations in income and spending? Who will be in charge of the finances and ensuring that invoices are paid on time? Who will be responsible for filing your tax returns?
Long before the wedding date, make sure to discuss expectations for a prenuptial agreement, which could include particular roles and obligations during the marriage. Prenuptial agreements, while they frequently receive a bad image, in my experience as a wealth manager, they can represent the depths of respect and trust in a partnership and should be carefully planned and implemented months before the wedding.
3. How are we going to keep track of the funds?
Every financial connection is unique. Some couples start with almost nothing and work together to acquire wealth. One partner may bring the majority of the assets to the partnership. Or, especially if there are children from previous relationships, both parties may have property, assets, investments, and even enterprises that should be kept separate.
These choices may entail feelings of control and independence, so they should be made in light of your money narrative conversations and in conjunction with your money management assignment choices. Decide whether you’ll combine accounts into one “ours” bucket or keep separate “my,” “yours,” and “ours” buckets.
I’ve seen married clients adopt a number of approaches, and I can assure you that there is no one-size-fits-all solution. One couple I work with elected to keep their finances completely separate from each other and resolve joint bills with each other at their monthly money date-night meetings — where they, of course, trade off who pays the fine dining bill each month. Discuss various methods and try them out to see which one works best for each of you. Discuss the modifications needed to make each of you feel more comfortable with how you’re arranging your financial resources if a strategy works for a while and then doesn’t.
If one or both of you have substantial assets or legacy inheritances that you wish to keep in the family, be informed of your state’s property laws and consider consulting an estate planner or family law attorney to draft appropriate agreements, including a prenuptial agreement, if you both agree.
Marriage is both a romantic and a professional partnership.
A healthy relationship is built on open communication and honesty. And it’s easy to sidestep the more challenging, and often emotive, topic of money when you’re in love. Allow your personal values to guide your financial decisions and values. In addition to knowing each other’s financial situation now, spend the period leading up to the wedding to describe your life goals and figure out how you’ll pay for them jointly. Don’t stop there, either. Goals, aspirations, and money change with time, so keep these dialogues going throughout your marriage to ensure you and your spouse stay on track.
This website does not provide investment, tax, or financial advice. For counsel on your individual circumstance, you should seek the opinion of a licensed professional.
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