As newlyweds, you’re entering a beautiful new chapter of love, partnership, and—wait for it—shared bank accounts. Marriage is all about compromise, from deciding who gets the last slice of pizza to figuring out who’s responsible for paying the bills. And when it comes to money, it’s less about whose turn it is to buy dinner and more about aligning your financial goals. It could be splurging on a vacation or saving for the future. Especially for young couples, whether planning the wedding or several years into the marriage, getting on the same page financially is vital to a healthy, mutually respectful relationship. In fact, it’s about the only way that you, as a couple, can set an effective course for growing your wealth over a shared lifetime.
Why Money Matters
While most of us will freely admit that many other elements of a relationship are more important than money—shared interests and values, mutual respect, family, children, religion, etc.—few of us would advise entering into a marriage without having at least a basic financial game plan in place. After all, it takes money to live, and conflicts around money—especially when there isn’t enough of it to go around—account for the #1 relationship challenge of about 25% of couples. Not only that but according to surveys, around 70% of couples 25 and older who make at least $50,000 per year argue about money.
Clearly, most marriages could likely benefit from greater general agreement about money. And especially for those who are aiming to build the kind of wealth that can handle education expenses for children and an eventual, comfortable retirement, having clearly defined goals and strategies in place from the beginning of the relationship can pay huge dividends in later years—especially in reduced stress around financial matters.
What’s Your “Money Personality”?
It is common for one or the other partner in a marriage to be the “money person.” That’s fine, but it is still crucial for the other spouse to have at least a working knowledge of household income, bills that have to be paid, and other day-to-day financial matters. If there is separate property owned by one spouse or the other, this should be thoroughly discussed and understood. It’s also fairly common for one partner to be the designated “saver” and the other to be a little freer with spending. Again, this is fine, as long as both partners are communicating their perspectives and there is general agreement around basic budgetary matters. Knowing your partner’s “financial personality” is a crucial first step toward good communication. Taking a free online money personality quiz together can be a good first step toward a better understanding of what makes your partner tick financially. This is also an excellent conversation for you to have together with a professional fiduciary financial advisor, who can then help you develop strategies geared around your particular strengths and weaknesses.
Talking about Debt
Most debt accumulated during a marriage is considered the responsibility of both spouses, and it doesn’t matter which spouse acquired it. Understanding and getting a handle on your debt is one of the healthiest things you can do for your relationship; a recent study on couples and finance by the Fidelity organization found that 40% of couples indicate debt as having a negative impact on the relationship.
Especially for younger couples, student debt, held by one or both partners, can be a significant challenge. As of July 15, 2024, 34% of adults aged 18–29 report having at least some student debt. Paying this debt can make it harder to save and invest and can also pose challenges when trying to qualify for a mortgage on a first home. If you are going into marriage with student loan debt, you and your partner should make sure you know how much you owe (including both federal and private debt), be familiar with the loan terms, understand the payment grace periods, if any, and perhaps explore any alternative payment arrangements that may be available to you. For student loans and other unsecured debt—such as credit cards—you may wish to utilize a cascading or “snowball” payoff strategy to eliminate or reduce your debt while still maintaining your other obligations.
Setting Goals
When couples have a mutually agreed goal that they are committed to working toward, they experience drastically fewer financial arguments. There will certainly be obstacles and unexpected bumps in the road, but when you are both agreed on where you’re headed, you are much more likely to recover and resume your financial journey together. Whether it’s paying for a child’s education, saving to buy a home, or planning a comfortable retirement, when couples agree on their most important goals and commit to helping each other achieve them, financial harmony is almost always the result.
Saving and Investing
The number-one rule for growing wealth over your lifetime is to commit to spending less than you earn. This may seem obvious, but for those who don’t follow a budget, and especially for those who reach too readily for credit cards to obtain short-term gratification, monthly debt service can easily rob you of the ability to set aside savings on a regular basis. Make it a goal to save about 10% of your income each month. Over time, as your savings balance grows, you should also set a goal of investing a portion of your savings in assets that can grow faster than inflation over the long term. In other words, putting money in a savings account, while an important start, is unlikely to enable you to grow the kind of significant wealth you’ll need to meet some of your long-term goals.
And speaking of saving and investing, you should also make it a priority to take advantage of any employer-sponsored retirement savings plans—like 401(k)s and 403(b)s—that might be available to you. Regular, systematic deposits in a tax-advantaged retirement plan are a primary wealth-building tool. And even if you don’t have access to an employer-sponsored plan, you can make contributions to an individual retirement account (IRA) and begin building a foundation for a more secure retirement.
At The Planning Center, we provide financial guidance and advice that places the client’s best interests ahead of everything else. To learn more, visit our website to view our webinar, “Marriage: Financial Planning Aspects to Consider.”
