Fiancé & Newlywed Finances: A Checklist
Before getting married, or soon after, discuss marriage finances and make a budget.
In just about any long-term relationship, finances will come into play, and in a marriage, it's essential to manage finances well together. Whether you're about to get married or have already tied the knot, it's a good idea to sit down with your partner and discuss money.
With finances, as with many things in life, an ounce of prevention is worth a pound of cure. If you and your partner approach your finances in a direct, matter-of-fact way early in the marriage, you'll provide a solid foundation for your relationship, and for your finances, as time goes on.
Financial Talking Points
When you sit down to talk with your fiancé or spouse, begin by sharing the current state of your finances. It's important to be frank and nonjudgmental. Fudging the numbers or concealing certain items from your partner could result in serious problems later. What's important is making sure your plan for going forward is one to which you are both committed. Here are some basics to go over:
- what's important to each of you when it comes to finances
- how you will manage your assets (what to combine, what to keep separate)
- will you use the same bank account? credit cards?
- how you will deal with differences in income
- how you will manage the payment of expenses, and
- what to do if your fiancé or spouse has incurred a lot of debt.
Many of these questions are subject to the law of the state where you are getting married, and if you want to do something other than what the law provides, or make sure that you don't share certain property or that you're not responsible for your new spouse's premarriage debts, you may want to consider making a prenuptial agreement. To learn more, see Prenuptial Agreements-An Overview, and Prenuptial Agreements: How to Make a Fair & Lasting Contract, by Katherine E. Stoner and Shae Irving.
Planning for the Future
In your discussion of finances, it's worth discussing future costs, even if you can't know exactly what these will be. Do you plan on buying a house together? Having children? Taking a trip around the world? Moving? All of these things require significant financial investment. Be sure to discuss the following:
- financial goals you are working toward
- new furniture or other items you will purchase and own together
- how to save up to buy a house
- how to plan for having children
- how to fund retirement plans, and
- any other plans do you want to put in place for the future.
Making a Budget
Sit down with your partner and make a budget. Start by listing the following.
Income
- Salary or wages
- Bsiness income
- Property income
- Investment income
Assets
- Bank accounts (with balances)
- Investments (stocks, bonds, retirement accounts)
- Property
Debts
- School loans
- Mortgages
- Home equity loans
- Business loans
- Credit card debts
- Loans from parents or family
Expenses
- Rent/mortgage
- Utilities
- Food
- Clothing
- Car/transportation
- Support for children from a previous marriage
- Insurance
- Entertainment
- Travel
- Education
- Loan and credit card payments
- Taxes
- Retirement contributions
- Other purchases (household goods, toys, electronics, and so on)
Making Your Financial Relationship Work
Once you've made these lists, consider the following:
- Do you and your partner have enough income to meet your expenses?
- Which assets will you keep separate, and which will you share?
- Which expenses will you keep separate, and which will you share?
- What should you do if one partner isn't meeting his or her expenses?
Whatever your financial situation, it's always better to be open and honest than to be unpleasantly surprised in a moment of stress or crisis. For more details on budgeting, read Nolo's article Budgeting: How to Make a Budget. For practical advice on planning your family's finances, see The Busy Family's Guide to Money, by Sandra Block, Kathy Chu and John Waggoner (Nolo).