Marriage is a huge decision and an exciting time in anyone’s life. It is easy to get caught up in this excitement and focus on the ceremony and reception. However, sometimes couples are so focused on wedding that they forget to consider the marriage that comes after. One of the factors to securing a happy future is discussing key issues before the wedding. Perhaps the largest issue that must be addressed is financial. It may not seem very romantic to discuss money while you’re picking flowers, but certain questions are necessary.
Debt
Perhaps one of the most concealed issues prior to marriage is the question of debt. Who has the debt and how much? It’s important to disclose this information at the outset of the engagement, especially if you have a lot of debt. Perhaps your partner won’t mind helping you pay it off and straighten out your finances. However, if you hide the information until after the marriage, you’re just asking for trouble. Be honest about how much debt you’re bringing into the marriage and avoid the resentment that will occur later on.
Bank Accounts
Before you get married, you need to decide if you’ll have a joint bank account or maintain individual accounts. If you trust each other completely, at least on a financial level, you may only need joint accounts. Otherwise, you might want to have a joint account for joint expenses and individual accounts for individual expenses. This makes each person responsible for any wants and needs that may occur.
Who Pays That Bill?
If both partners make the same amount of money (or almost the same amount), then it’s usually simplest to allow everyone to pay for half of the expenses. But in many cases, one partner may earn significantly more than the other. Perhaps one partner is a stay-at-home-parent. In this case, you really need to discuss who pays for what. If you just assume that you already know the answer to this question, you will likely experience resentment towards each other at some point.
What Do We Do If We Lose Our Jobs?
Have a candid conversation about what to do in the event of financial disaster. What if you lose your jobs? Discuss how you would manage to pay the bills for a few months. If you don’t have any cash reserves, consider how you will build up enough savings to survive if the worst happens and both of you are laid off at the same time.
Financial Goals
Long-term goals are a good thing, but they need to be discussed. If one of you wants to take expensive vacations and the other wants enough money to pay for your children’s education, you may have to have a discussion about how to deal with these different goals. Perhaps they can both be met on your current income. Perhaps not. If not, explain to each other why you have those particular goals and try to compromise.
You should also have financial goals as a couple, things that you both want to accomplish. Before walking down the aisle, create a plan. Outline the steps you need to take in order to accomplish your shared goals. Don’t forget to address how you will afford large purchase. Will you borrow money or save? It may seem like a simple question, but it can drastically change how you relate as a couple.
Financial Styles
While there is no right or wrong when it comes to spending styles, it is important to discuss how each of you likes to spend money. Partners with very different spending styles may find themselves arguing over money on a frequent basis. If one of you is responsible and saves judiciously and the other racks up the credit cards every day, a clash is almost inevitable. The two of you could end up resenting each other all over a little money.
This doesn’t mean that you can’t get married. But get married with a plan. Make a list of income and expenses and indicate who is responsible for paying what. Then discuss disposable income and what you should do with it. You may both have to compromise. Perhaps the saver agrees to spend a little and the spender agrees to stop using credit cards. The marriage can still work if you both approach it with open eyes.
When Do We Consult Each Other?
It’s important to establish clear rules when it comes to buying various items. While you probably don’t need to consult each other when buying a head of lettuce, it may be unwise to buy a new car without discussing it. Make sure each partner understands when a purchase needs to be discussed beforehand.
How Do We Invest?
Investing is wise, but it’s also a big deal. It’s not something one person should handle alone, not when that person is married. Discuss investments early on to make sure you both agree when it comes to what investments you hold as a married couple.
One of the largest issues cited in divorces cases is money. How much is available and what is done with it is important to people, including you and your prospective spouse. It may seem awkward to discuss money before you’re married, but understanding each other financially is one of the most powerful things you can do to save your marriage.
I'm single parent. I've been a single parent since my youngest son was born more than five years ago. I enjoy being a single parent. I enjoy it so much I have no intention of remarrying at any point. Because of this, I can sometimes come off as anti-marriage. I'm not. I even enjoyed most of my marriage. But I do understand that when I write about single parenting, it might come off like I'm promoting it. I'm not. I promote whatever works best for you. So when a reader asked if I could write about the benefits of marriage, I agreed. I even agreed when she suggested the first of these articles be on the financial benefits of marriage.
Marriage brings with it many benefits and involves sharing many things. One of these things is finances. Combining the income and expenses of two people almost always results in more money available, but this isn’t the only financial benefit of becoming legally married. Some of the benefits are obvious. Others are less so.
Living Expenses
Many expenses that can cripple a single person are much easier to manage for a married couple. The mortgage or rent is easier to manage as a couple, as are utility bills, car payments, and other monthly expenses. A married couple only needs one of many items, such as furniture. In addition, it is actually cheaper to buy food as a couple than it is for two single people to feed themselves. Buying food in larger quantities is inevitably cheaper and there will be less waste.
Car Insurance
Insurance agencies view a married couple, especially a married couple with children, as less of an insurance risk for a variety of reasons. Married couples gain a significant discount when they combine their plans into a single policy.
Health Insurance
It is usually more expensive to maintain two single health plans than it is a single plan to cover both parties. One policy can usually provide for an entire family, including children, at a fraction of the cost of individual policies.
Financial Stability
Two incomes simply make for a more stable financial reality. It enables the couple to afford a higher standard of living, save more money for emergencies and future luxuries, and weather financial disaster with greater ease. If one partner loses his or her job and must begin receiving an unemployment check, the second income can mean the difference between bankruptcy and scraping by. A second paycheck also enables one partner to take parental leave in the event of a baby. This is much more difficult for a single parent surviving on one income.
Credit Scores
When two people marry, their credit scores do have some effect on each other. This means that someone with a lower credit score may be able to recover their credit faster by marrying someone with a higher credit score. The partner with the higher credit score may suffer slightly, but in the long run both parties will be better off, assuming that both parties are responsible about their finances from the point of the marriage onward.
Obtaining Credit
Lending institutions such as banks are more comfortable lending money to a married couple. There is more security in lending to a two-income family, but this isn’t the only reason. Banks often feel that a married couple is less likely to default and disappear than single people with no attachments. A married couple also usually has more assets, which again reassures potential lenders. Married couples are even sometimes offered a better rate on borrowed money.
Assets
Assets are usually greater in a marriage. And though no one likes to think about divorce, in the event that the couple decides they must go their separate ways, assets are normally divided equally between the couple. Without the protection of marriage, it is more difficult for one spouse to claim some of the assets of the other.
Social Security Survivor Benefits
For a couple that has been married in excess of ten years, social security survivor benefits can be claimed in the event of the death of one spouse. If this death occurs before the required ten years have passed and there are children of the marriage, these children become entitled to receive social security survivor benefits.
Tax Benefits
For the most part, a married couple is able to claim more tax deductions than single people. There are also deductions available for couples who have children. Many of these deductions are available for single parents, but some are very specifically intended for married couples who have children either through adoption or birth.
The financial benefits of marriage are immense. They allow a couple to be protected through the birth of a child, unexpected death, retirements, or even divorce. While this should not be the deciding factor when it comes to marriage, it is certainly something to consider. Your future financial security may depend on your decision.
