Getting married? Here are five financial "to-do’s" before you tie the knot

By: Mark Shimkovitz

Getting married is an exciting milestone and the start of many new experiences as a couple. Unfortunately, one important issue often not addressed before tying the knot is the impact on your finances. Without discussion and planning, money is often a source of conflict. It can be as simple as how much you typically spend on your daily Starbucks, eating out and vacations, to more complex subjects like where you eventually want to live and your dreams for retirement.

Since finances impact so many of our lifestyle choices, being aligned on your philosophies and goals from the start will save you from confronting potential problems as a couple in the long-run.

By exploring the five topics below as a couple, you’ll set yourselves up for success. And if you find it hard to broach the conversation, check out our discussion guide.

1. Discuss your money personalities

We all have our own relationship with money, often rooted in our upbringing. Open and honest communication helps couples compromise and avoid conflict over time. Understanding your respective money motivations will help shape future discussions and reduce the risk of harshly judging your partner’s spending (or saving) habits.

Some good questions to get the ball rolling:

• How was money handled in your household, growing up?
• Are you a spender or a saver? How much do you save each month?
• How did you manage or budget money up until now?
• What’s your credit score, and how important is it to you?
• Do you pay off your credit card balance every month?
• What’s your investing philosophy?

2. Determine your joint financial goals

Finding shared purposes can help ensure you are both on the same page in terms of spending and saving. Write down your short-term and long-term goals, both individually and as a couple. Then determine what is most important to you both and how you can stay motivated to get there. These could include things such as:

• Home purchase or renovation
• Children and childcare 
• Advanced education (college, graduate school, or training)
• Starting a business 
• Changing careers
• Travel
• Retirement

Make sure to go deeper than the surface. For example, in your dream world, how much would you budget for an annual vacation? Where would you go? What are your retirement goals — at what age would you like to retire? What do you envision?

Outlining and prioritizing joint financial goals provides a framework for spending and saving, and developing a roadmap for your future. It’s possible that your goals and opinions about the future may differ, and that’s ok, as long as you set priorities to ensure you’re both happy.

3. List your assets and liabilities 

Both partners will likely bring some assets and potentially some debt into the marriage. Assets might include cars, houses, savings accounts, and investment accounts; while debts might consist of student loans, mortgages, or credit card bills.

Both spouses should know upfront precisely what each party brings to the table, as debts and assets affect spending habits and joint loan qualifications. Spouses should share their individual debt amounts, discuss repayment plans, and decide whether they plan to tackle the debt alone or together.

4. Combining finances

Should you combine your financial lives as a couple? You’ll need to decide together what makes sense for you. If you determine you’re on the same page financially, combining your finances can be convenient, allowing you to contribute to and pay shared bills from one pool of money, rather than determining how to split expenses. However, if you have very different views on spending, saving and investing, you may want to consider keeping your accounts separate to lessen potential conflict over how money is spent.

5. Setting a monthly budget

Once you’ve established your financial goals, you can then outline a monthly budget to ensure you stay on track with your spending and saving. Remember, this will be a fluid document that will evolve throughout your marriage as your goals and priorities change.

You should also decide who will handle which aspects of money management and bill payment. If one person is designated, make sure that both of you are still involved in making financial decisions.

If you’ve decided to maintain separate accounts, determine how to split the bills. Some couples divide expenses in half, while others use a percentage of income; for example, if you earn 60% of your combined income and your spouse earns 40%, you cover 60% of the bills.

Whatever you decide, making sure your financial conversations are open and transparent from the start will ensure that money doesn’t become a source of conflict in your marriage.

Mark Shimkovitz is a Financial Advisor with Raymond James Ltd. Information provided is not a solicitation and although obtained from sources considered reliable, is not guaranteed.  Raymond James advisors are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters. The view and opinions contained in the article are those of the author, not Raymond James Ltd.  Raymond James Ltd., member of Canadian Investor Protection Fund.