For Richer or Poorer: Money Matters for Newly Weds

As unromantic as it sounds, finances play a big role in how successful—and how happy—your marriage will be. Money is the No. 1 cause of stress in relationships, according to a survey by SunTrust Bank, and having financial arguments is the top predictor of divorce, a separate study by Kansas State University found. On the plus side, a MONEY survey revealed that couples who trust their partner with finances felt more secure, argued less, and had more fulfilling sex lives.

That level of trust, though, isn’t common among newlyweds. By your wedding day, you know many things about your spouse-to-be. But if you’re like most couples, there may still be big gaps when it comes to his or her finances. “We’re intimate with our partners in so many ways before marriage, and yet money remains off the table. That’s a problem,” says Paula Levy, a marriage and family therapist in Westport, United States

 Financial intimacy starts with better communication, and that’s where this story comes in. We’ll tell you how to get your financial partnership off on the right foot, the right questions to ask, and pitfalls to avoid—with the help of anecdotes and advice from real couples. And if this is a second marriage, or if you’re approaching or in retirement, we’ve got extra pointers specifically for you.

It’s time to have some fun in the sheets—balance sheets, that is. If you haven’t done so before, make time this month to discuss all the assets and debts you are bringing into the relationship. Come clean about salaries and other income, as well as your spending over the past year. A recent survey found that 38% of couples were only somewhat or not at all aware of their significant other’s debts. In fact, 43% of people don’t even know how much their partner makes, a Fidelity survey found. The irony: 72% of those same couples said they communicate exceptionally or very well about financial matters.

“Everyone in the marriage needs to go in with their eyes wide open. You don’t want to be blindsided later,” such as by unknown debt, says Damian Dunn, a financial planner based in Auburn, Indiana (USA)

Being honest about finances was tough at first for Chicago couple Erica and Wade Loewe, 35 and 38, respectively. “We had to overcome a great deal of fear and shame,” says graduate student Erica, who worried that Wade might judge her for her debt. Wade, a service technician, felt uncomfortable because money wasn’t discussed in his family. But “it wasn’t as scary as we thought,” he says. “Once we knew what each other owed and had, we could focus on making a plan and tackling our debts.” Eight years after the wedding, they have paid off more than half the debt that Erica brought into the marriage.

Your upbringing colors how you handle and view money. If you often squabble about finances, try to figure out why your partner saves and spends the way he or she does, says Kathleen Burns Kingsbury, author of How to Give Financial Advice to Couples.

Start off easy, with questions such as “What’s your first money memory?” or “How did you spend your allowance?” suggests Kingsbury. Move on to “What’s the best thing you learned about money from your parents?” and “What’s one thing they taught you that you want to leave behind?”

Kingsbury recalls one client who inherited his middle-class parents’ frugality. His wife was raised in a household where money was far tighter; now that she was earning a good salary, she wanted to enjoy the best and provide their children with an experience very different from her own. Understanding their histories helped lessen the frequency and duration of their money disagreements, she says.

Bob Saumur of Champlin, Minn., now 72, says he learned early on in his 48-year marriage that money arguments aren’t really abut dollars and cents. “It’s about how the person looks at life and what his or her priorities are,” he says. The first money clash with his wife, Sue, centered on what home repair they should make with a bonus Bob earned. He wanted a water softener. Sue wanted new carpeting. “We ended up flipping a coin, but I couldn’t understand why she didn’t agree with me,” recalls Bob. “It was only later as we talked it over more that I realized her wanting carpet was really about the health of our child, who was just then starting to crawl.”

Some spouses pool their money in joint accounts, while others keep their dollars separate. For Ruth Bacher and her husband, Jason, both 40, setting up a joint account and keeping some money separate made more sense. “We both had a lot of financial history prior to marrying,” says Ruth, a corporate purchasing consultant, who had already been married once and didn’t want to burden Jason with the student loan debt she was bringing into the union.

When Sejal Madhubhai, 26, married Erik Hansen, 31, last year, she was earning a lot less than him. “That pay disparity gets to me,” she says, making her feel guilty at times for spending money. To make it more comfortable, the Orlando couple divvy up the bills so that they share four main categories of household responsibilities. Sejal pays the rent and utilities. Erik pays more in dollars, taking care of credit card and health insurance payments.

There’s no one right approach that fits all newlyweds. What matters is that you agree on a system and—here’s the important part—are open to changing later on. You have to be “flexible in the sharing of expenses,” says Ruth Bacher.

That’s because what seems fair at the outset may not end up being so. Therapist Paula Levy recalls one couple she helped who chose to divide all joint expenses fifty-fifty. The problem? The husband earned significantly less than the wife. “He was maxing out credit cards, struggling to afford his half of the bills, and his wife didn’t even know,” she says.

The top source of financial conflict among couples is “overspending on frivolous purchases,” MONEY found in a survey of millennials and boomers. Ease that tension by deciding on a monthly amount that each spouse can freely spend, no questions asked. Just agree to consult each other on the big stuff. SunTrust found that 36% of partners do not talk to each other about large purchases, while a CreditCards.com poll showed that one in five people in a relationship admits to spending $500 or more without telling the other.

Sources: SunTrust, Institute for Divorce Financial Analysts

Agreeing on a limit above which you need to clear purchases gives the spouse who spends more some autonomy, while the more frugal partner can rest assured that the other isn’t depleting the accounts.

 ? Team up to save.

Maintaining one household is typically less expensive than living separately, and paying less for housing is only one of many ways you can save. Cell phone providers and car insurers, as well as facilities like gyms, often offer better deals when you sign up jointly. CLICK HERE TO SAVE ON COMBINED CAR AND HOUSEHOLD INSURANCE.

? Lay out your financial priorities.

To achieve your goals, you first need to agree on what they are: buying a home, starting a family, declaring yourselves debt-free? Start by each independently listing your top goals, what you think your spouse’s top goals are, and what you think your top goals are together, says financial planner Jeff Motske, author of The Couple’s Guide to Financial Compatibility. Share your lists to shape a joint plan.

People who identify specific goals make faster progress toward their savings and investing targets, TD Ameritrade has found. “Give yourself a deadline and dollar amount,” says financial planner Dunn. “Most people are hesitant to really define goals because they’re afraid they will fail, but not having a clear plan makes you more likely to fail.”

Decide on your roles.

Typically, the person with the most aptitude, interest, or time for a particular money task becomes responsible for it. When Erin and Jayson Davis, now 37 and 34, got engaged 10 years ago, Erin discovered a pile of overdue bills and notices in his apartment pertaining to Jayson’s $120,000 in student loans. She was worried that he didn’t have a good handle on his budget or a clear repayment strategy.

Turns out, Jayson was simply overwhelmed by his 80-hour workweeks. Erin stepped in and continues to oversee the bills today, as a stay-at-home mom to four kids. “I have a sheet on which I keep track of the monthly bills, and I make sure everything is paid on time,” she says. Having one person handle a lot of the money tasks is fine as long as both of you have a strong sense of your overall financial situation. Get that by going over your numbers together every month or quarter.

What if you have different approaches to investing? A risk-averse investor and a risk-taker might divvy up their money to manage separately, suggests Rapid City, S.D., financial planner and financial therapist Rick Kahler. “Often they will balance each other’s risk exposure out,” he says. Still, you or a financial planner should check that all the pieces fit together with your long-term needs.

Source: LearnVest

? Get your paperwork in order.

It’s no fun, but you need to update or write wills to spell out your wishes for your assets if something happens to you. Without a will, state law decides. You’ll probably also want to appoint your spouse to make medical decisions for you if you can’t. And update your beneficiaries on retirement accounts and insurance policies. NEED ASSISTANCE TO UPDATE YOUR PAPER WORK CLICK HERE

Know when to ask for help.

If you and your spouse find money conversations extremely tough and unproductive, you may need to bring in a financial planner, accountant, or other professional to help.

For DD and Joe Kullman, 56 and 64, hiring a financial coach two years ago was a marriage saver. “We’ve been married 17 years and have had completely different perspectives and philosophies about handling money for most of it,” recalls DD. There were tensions between saving and spending, including about financing things for her two sons from a prior marriage.

The coach helped the Kullmans create a budget and separate accounts for different goals. “It took the emotions out of play” and allowed the pair to pay off $25,000 in debt over the past two years, says DD.

In hindsight, getting help earlier “would have made all the difference,” says DD. “I know we would be further ahead on paying off our debt and with our savings.”

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Adapted from the original post: https://time.com/money/4776640/money-tips-married-couples/