Wedding Tips: Finances for Engaged Couples


Did you know that in a past life, long ago, I spent about a year working in an office as the assistant to a financial advisor? While I didn't follow that career path, I learned so much about life finances that I never expected. Many engaged couples focus on the wedding ceremony, reception, and honeymoon, and far fewer spend enough time building the foundation for a strong, lifelong marriage.  There are all kinds of negative statistics about divorce rates and factors leading to it. For example, two of the top three reasons for divorce are lack of communication and money issues. You and your partner can turn this negativity around since there is growing evidence that preparing for marriage can significantly reduce the risk of divorce. It's not the most exciting conversation we're going to have, but because I want you, dear reader, to be successful in all of your adventures, I thought this was important to share with you.

There are faith-based as well as nonreligious programs that can help couples prepare for a positive, growing marriage.  An important tool used in most programs is a premarital inventory. It is not a test, but instead, is an inventory that makes sure couples have talked about the most important issues.  One of the least-discussed areas is finances of the couple. One study indicates that 70% of adults have negative thoughts and feelings about discussing finances with their partners. In our culture, we’ve been raised to avoid talking about salaries, debts and financial goals.

Getting married changes your legal status.  This means you’re taking on new responsibilities, so it’s vital that you and your partner have open conversations about finances.  More people are getting married later in life and are accumulating assets before marriage these days, so meeting with a financial professional before the wedding is becoming an increasingly important step.

You and your partner may have been brought up with different attitudes about money and may have different ideas about what financial fitness means.  A professional, neutral advisor can help identify past baggage and help you form a workable plan for your combined financial future.

You and your partner can take action by:

  • talking about childhood influences

  • sharing details about your financial past

  • identifying current earning and spending patterns

  • deciding on joint or separate accounts or a combination of both

  • dividing financial roles

  • protecting assets already in place

  • outlining joint financial goals

  • learning about tax implications

  • making a will and possibly changing beneficiaries

  • paying for health, life, home, and vehicle insurance, and

  • forming family and career plans

Here are some more in-depth tips:

  • Talk About Money With Your Future Spouse: This may seem like an obvious one, but in my experience, it is something that most couples do not discuss as much as they should before they get married. It is very unlikely that you and your spouse have the exact same relationship with money, the same spending and savings habits, or the same financial goals. Spend some time discussing each other’s finances and ask the right questions. “Hey, honey, do you have debt? What kind of debt? Do you save for retirement? Do you have an emergency fund? Do you have investments?” Understanding your fiancé’s financials is crucial. Also, you will need to be open about your finances, even if you are not particularly proud of the current situation.

  • Decide How You Will Re-organize After Marriage: Just like any merger, you will need to set up a game plan for how the bills will get paid after you get married. Some couples decide to immediately merge all of their money. Some couples do the exact opposite and keep everything separate. This is all a personal preference but you should discuss this before you get married. Also, who will be “in charge” of the bills? Will you divide and conquer or will one person be designated as the “bill payer”. Also, before you get married, it may be helpful to have a conversation with your CPA about how your combined incomes will affect your tax bracket.

  • Talk About Your Budget And Your Emergency Plan: Along with marriage comes a new “high level” set of responsibilities. Therefore, it is crucial that you understand your budget and your combined incomes. Spend some time observing what is coming in and out and monitor each other’s spending habits. Use this as an opportunity to store up enough money for an emergency fund and/or some short-term liquidity.

  • Talk About Your Financial Goals: This is a great opportunity to discuss some of your medium-term and longer-term financial goals. Do you want to start a family? Do you want to buy a home? If these goals are on your list but not on your fiancé’s list, then that is actually a much bigger conversation. If you aligned in terms of goals, use this as a time to plan out some savings targets.

  • Make Sure You Have Insurance: As I mentioned, when you get married, you are responsible for your spouse’s liabilities in the event something happens to him or her. Make sure you have the right amount of life insurance to protect you both in the terrible chance that something happens to one of you. If you need help in making this determination, find a financial advisor (I recommend the folks at Northwestern Mutual, they're fantastic). Also make sure you have the right health insurance. It may make sense for you to stay on your individual plans for now. Conversely, one of you may have better health insurance so it will make sense to make the switch. Finally, do you both have liability insurance?

  • Change Your Beneficiary Information: This is true if you are about to get married or have recently divorced. If you were to die and you do not change your beneficiary information on your retirement accounts, your insurance policies or your will, your assets will go to the beneficiaries that you chose when you opened the account. As much as you love your brother and sister, you probably would prefer your money to go to your spouse!

The best advice I can give an engaged couple is to be as upfront and communicative as possible when it comes to money. If you are having a hard time discussing the topic with each other, perhaps it makes sense to talk to a Financial Advisor. A good advisor can lay out your current financials, discuss your goals and help you create a plan that works best for both of you. In the end, you will not regret getting financially organized early on in your marriage! Just remember that this process is not designed to dwell on the past. It is a way to use the past to guide future financial decisions in your life together. But if some financial baggage exists, it is better to expose things early on so you can create effective solutions as a couple. While all of this may still feel overwhelming, you and your partner can reward yourselves by following each discussion or meeting about finances with a special date to celebrate the reasons you’re getting married in the first place!  You will not regret the time and effort put into your financial future. (*Disclaimer: this information is meant only for guidance and should not be regarded as legal or financial advice.)

I've got your back,