Broker Check
Transition Series- Marriage

Transition Series- Marriage

June 10, 2024

What do you think about when I say the phrase, getting married? The first thing that likely came to mind was a wedding; the ceremony, the party, the white dress. What likely did not come to mind was the business aspects related to this blessed union.

Marriage is a big deal. Both emotionally and financially. I think that has something to do with people today getting married later in life. According to the U.S. Census Bureau the median average age for men to get married has risen to 30.2 in 2023, up from 26.5 from 1993. For Women the median average age is 28.4 in 2023 up from 24.5 in 1993. Over 30 years people on average are delaying marriage by 4 years. Personally, I was married at 26, 10 years ago. So, I even track with the statistics.

Marriage is not only a decision to choose to spend your life with one person, but it is also a financial decision. Money and the conflict around it are one of the most common things couples argue about according to The Gottman Institute. As you are considering marriage, or about to be married I would like to provide you with some conversations and ideas on transitioning your single financial life into a unified one.

Before you get married, I encourage you to have the following conversations:

  • What was money like for you growing up? How does it make you feel about money today?
  • Are you a spender or a saver?
  • If we choose to have kids, what do you hope they learn about money?
  • Tell me about a time you regretted a financial decision and why.
  • Share and go over all your assets and debt in detail. I call this the balance sheet conversation.
  • How do you want to talk about money?

Make a date out of it. The best way to avoid conflict is to understand where the other person is coming from. By understanding your partners’ thoughts and feelings around money and how it has operated in their life up to this point it can help you both when conflict and hard times arise. I encourage these conversations anytime you as a couple go through a big change together.

Prenups

A prenuptial agreement, by definition, is an agreement made by a couple before they marry concerning the ownership of their respective assets should the marriage fail. Think of it like preparing a will or a trust, but for your marriage.

No one gets married wanting to get divorced. However, prenups are no longer for the ultra-wealthy and famous. More people today are using both pre and postnups as a part of their overall financial picture and a layer of protection.

According to a Harris Poll conducted in 2022 the use of a prenup has risen to 15% of couples and up from 3% in 2010.

While an additional cost and a need for lawyers, the insurance provided by a prenup may be something to consider. It does start with the conversations above to be properly crafted.

Combining Finances

Have a plan going into marriage about your day-to-day finances and big financial decisions. The best place to start is to understand how your partner has handled this up until this point. I encourage couples to come to this from a place of understanding and not my way is better than your way. Listening is key here.

There are different ways to approach combined finances once you understand how you each do that. Let’s explore.

Joint everything. This is what people most commonly think of when you get married. You combine your individual accounts into joint accounts. What’s mine is yours and vice versa. This works great for couples who are on the same page and communicate well about their spending.

Completely separate. You agree that you maintain your separate spending accounts. Agree who covers what bill on their own. If a big purchase comes up, the cost is typically split. Budgets are independent of each other, and the other spouse knows little to nothing about the other’s finances. This works well for people who think completely differently about money and to prevent conflict by granting that independence.

A blend of the two. Here we see a joint account maintained for the day-to-day bills of the household and joint savings for the household emergency fund. Each spouse sends an agreed upon amount to that account each month. Beyond that individual accounts are maintained for discretionary spending of each spouse. This blends for the household purchases but allows for two spouses with different priorities personally to spend freely.

Each of these options can work and nothing says you must have joint accounts. What will work is the method that gives you as a couple the best chance for success. Communication is key here.

Growing Together

As you go through life together, know that everything will change. As you go through the ups and downs of life in a marriage it is important to revisit where you are, where you want to go and the best way for you as a couple to get there.

What worked for you at the beginning of your marriage may not work down the line. Revisit this annually and communicate well. If you need help, I encourage a therapist if needed or a third party like a financial professional.

Marriage takes work and part of that work is the money and how you use it as a couple.

Congratulations to those tying the life and financial knot this year. I wish you a full and happy life together.


ART#586402