1) Get on the same page about short and long-term financial goals. Whether you’re already married or on the path to marriage, you need to be on the same page financially. If one of you is a saver and the other a spender, this can cause rifts in any long-term relationship. Talk about where you want to be in a year, 5 years and dream a little about what retirement might look like for the two of you together.
2) Share your financial secrets BEFORE you walk down the aisle. Talking about money isn’t always easy, especially with your future spouse. It’s an intimate conversation and should be approached with a non-judgmental attitude on both sides of the table. If you’re coming into a marriage with a low credit score from past poor financial decisions, a large amount of consumer or student loan debt, or even a hefty family trust or inheritance, your partner needs to know. If you want to protect both spouses financially before you say, “I do,” consider a prenuptial agreement. If you’re already married and want a similar type of financial protection, you can consider a post-nuptial agreement.
3) Create and follow a budget. Be ready to compromise, but don’t just give in to everything your spouse wants. That will only create resentment down the road. Remember that you’re both working toward the same end goal. Revisit and balance your budget each month. Once you’ve gotten started, this process doesn’t take a long as you would think. Especially if you’re jointly using one of the many free apps available to help with this.
4) Define what constitutes a major purchase. Use your defined threshold (in my marriage, it’s $200) to clear things with each other. I don’t need or want to know about every pack of gum or woodworking tool my husband buys. However, if one of our purchases is going to total over $200, we, at the very least, inform one another and discuss as needed. Consider adding a “fun money” line item to your budget so you each have some freedom to spend with some anonymity.
5) Watch your language. You may be wondering what language has to do with finances in a marriage. What I mean by this is that you need to approach the subject of money like the sensitive topic it is and try to keep it rational rather than making it emotionally charged. Don’t use harsh words, raise your voice or assume that you know more than you spouse. Speak to each other like equals, even if one of you is the primary breadwinner and the other is a domestic engineer. You’re both equally important to your relationship and achieving your financial goals.
6) Don’t be afraid to ask for help from a professional. If you know where you’re going, but you’re not sure how to get there, asking for directions is always a good idea. Planning for your future together is an important process, so seeking advice about things like investments, insurance, taxes, estate planning, etc. from professionals in these fields can be very helpful. We recommend working with a Certified Financial Planner™ professional that is a “fee-only” fiduciary advisor. In other words, someone (like the planners at Worley Erhart-Graves) who is going to make comprehensive financial plan recommendations that are in your best interest and not try to sell you any financial products along the way.
7) Update or create your estate plan. Did you know your spouse is not automatically granted the rights to help you make financial or medical decisions just because you’re married? You need legal documents in place to make this a reality. If something happens and you become incapacitated, the absence of estate plan documents can create a very expensive and chaotic situation for your spouse.
8) Update your beneficiaries. This is especially important for people who are in a second marriage or have children. You wouldn’t want your ex-spouse to inherit your 401K if you passed away tomorrow, would you? When you are working with your estate planning attorney, ask them for the proper language to update beneficiaries on any applicable assets.
9) Talk to a tax advisor. If you’re getting married, this means you’re most likely going to be combining incomes on a joint tax return. Talk to a tax advisor (ahead of tax time) about what changes you can expect and if it will make sense to file as a couple or keep your tax filings separate.
10) Review your plan together at least annually. A lot can happen in a year. You could change jobs, discover you’re going to have a baby, or have new expenses related to a home purchase. It makes a lot of sense to review your plan and see where you can improve or just take a moment to enjoy that you’ve achieved some great financial accomplishments together.