Some of us may have attended a festive spring or summer wedding this year that may have led us to begin thinking about marriage with our significant other. Marriage is an exciting commitment to the one we love and desire to spend the rest of our lives with! With it comes the binding of one person to the other including their finances. It’s important for you and your spouse to be on the same page about money before getting married, such as income expectations, credit card usage, savings goals, spending vs. splurging, etc. However, assuming you both have similar goals and values that you’ve already discussed, there are also some logistical questions you might want to consider before the big day.
How expensive will your wedding be and who will pay for it? Weddings can be quite expensive and as such, could put a serious strain on your finances, especially for a young couple just starting out. Not to mention the costs of the Honey Moon. First decide if a big festive wedding is really what you both want. A smaller wedding with a select few in a nearby setting can save you tons of money, and still give you the same wedding day feeling. No matter how big or small the wedding may be, make sure you discuss how you will be covering the costs, keeping in mind that there are many unforeseen expenses that add to the total wedding dollar amount. So make sure to budget accordingly.
Will you merge assets? For most couples, the answer to this question will be, “Yes”. However, it is important to know if this approach will work for the both of you. You can also take the hybrid approach and combine only certain assets, leaving other assets solely owned and managed by you. If you do choose to combine your finances and accounts, also discuss when this will occur – during the engagement period or after you are married. Bad timing can result in neglected finances that will start your financial journey together on the wrong foot. If you are on a second marriage, you may want to (or have to) keep some of your assets separate because they are part of arrangements made with your former spouse or children from a previous marriage. In this case, make sure your new spouse knows exactly what the situation is (and make sure you know of any similar arrangements he or she has) and, if necessary, consult a lawyer to help you sort through any particulars.
Who will manage the finances? In most relationships, one person takes the lead on managing financial matters, including bill paying, investment decisions (perhaps with the help of a professional) and tracking savings and net worth goals. It’s usually clear which individual this will be but that isn’t always the case so make sure you talk about it and agree on who will be responsible for what. This will help avoid misunderstandings or mistakes that may arise about unpaid bills, tax issues or anything else. If one person is in full control of managing the finances, discuss how and when the bills will get paid when/if that person has to leave the home for weeks at a time.
Although finances can be a difficult topic to discuss, making sure you are on the same page as your future spouse before marriage will save you a lot of financial angst down the line.
3 Financial Questions to Ask Before Marriage
