Personal Finance Tips For Newlyweds

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When a couple gets married, they’re not only joining lives, they’re joining bank accounts. Each person brings to the relationship different attitudes and ideas about money. One of the key’s to a happy and successful marriage is to get on the same page with your spouse about finances.

Here are 5 things that a couple thinking about getting married should consider before getting hitched.

1. Review your credit history and debt together

Before you get married, sit down and look over each others’ credit report. One person’s bad credit score, is bad for the couple. You don’t want to find out when you apply for a loan that your lovely husband racked up thousands of dollars in credit card debt to pay for a video game habit while in college. By then it’s too late. Finding out each others’ credit score before you apply for a loan can help you decide whether to leave the person with the crappy score off the loan application so you can get a good rate. If you don’t do this, you’ll end up like this guy:

The guy is kind of a douchebag when he says he wouldn’t have married his wife if he knew her credit report. But the commercial gets across the point that it’s important to know each others credit report before getting married. It will help you make decisions when taking out a loan.

2. Discuss financial goals

Find out each others’ financial goals and attitudes about money. Is your wife a spendthrift or a frugal monger? Does your husband want save for a down payment on a house or does he want to be a renter? You can preempt money tension down the road by getting your goals and attitudes out in the open from the very beginning of your marriage. If one of you likes to spend and the other likes to save, your marriage isn’t doomed, you’ll just have to come to a compromise. Make this compromise at the beginning of your marriage.

3. Decide whether to have joint or separate accounts

The choice to have joint or separate accounts is entirely up to your personal preference. Each has their benefits and drawbacks. It also doesn’t have to be either/or. Many couples have a joint account for home expenses and maintain separate accounts for personal ones.

If you do decide to open up a joint account, make sure you both are aware of how much is in the account. You don’t want to have pay unnecessary overdraft charges.

4. Draft a budget together

Budgets aren’t sexy. It’s tedious and boring. Creating a budget with someone else makes it even harder because each of you have different priorities on spending money. While you might want to allocate more money for entertainment, she might want more money for personal care products.

But creating a budget together is vital. It will help bring your spending habits more in-line with each other. It also makes BOTH of your aware of what’s going on in your finances instead of just one person being in the know.

What do you all think? Any other tips that you’d give newlweds? Drop a line in the comment box and add to the conversation!

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18 Comments

1. adam on 15.01.2008 at 10:39 (Reply)

   Not to throw a wet towel on the whole affair, but think SERIOUSLY about a pre-nup. I didn’t have one and when my marriage ended it resulted in half of my 401k going to my ex-wife (my 401k had grown to over 6 figures during the marriage despite the fact that I never earned close to that). Don’t get me wrong - I don’t begrudge my wife that money, but be clear lawyers earn significant amounts of money and you may want to protect it.

2. Alli on 15.01.2008 at 10:58 (Reply)

   I’m not a fan of married couples getting separate bank accounts. It seems to me that if you are not prepared to share your finances, then you are not prepared for the ultimate sharing of a life that marriage requires. I don’t think of my husband’s money as his money or the money I earn as my money. It is just OUR money.

   1. TiredinTucson on 15.01.2008 at 13:23 (Reply)

      I have been pulled into the separate accounts question multiple times, and I disagree with the idea of having the same bank account. My husband and I have separate accounts; we tried having the same account, but inevitably we would forget to tell the other about a transaction and then one or the other would overspend and we’d be broke or have an overdraft. After a couple of months, I opened my own account and we’ve been happy with our method.

      Basically, we list expenses and bills (he does the insurance and mortgage, I do utilities and groceries), each takes enough to cover and we dump the rest in savings or on long-term debt. I know how much is in my account, he knows how much is in his, we rarely, rarely overdraw (maybe two or three times in 7 years?) and everyone is happy.

      Separate accounts doesn’t mean separate money, it means we are each responsible for taking care of the bills we’ve picked with the money available. I am not even working right now, so there isn’t any “separate” money to come by. It’s just a system that works for us.

3. Ginger on 15.01.2008 at 16:24 (Reply)

   Awesome list! We went through having to decide on some of the same issues. Its definitely a struggle because you’re no longer doing it on your own but you have someone else to consider as well.

   To add…

   Discuss the MINOR things like name on the checkbook before you get married. This was a huge issue for us because I did not change my name. This affects merging accounts and just all around issues of maintaining individuality vs. simplicity.

   Discuss who will actually manage the money? Both? You? Him? Why? Who is actually more vested in the personal finances of your marriage? Huge responsibility.

   See the credit history BEFORE you marry so you know what you’re getting into. I helped hubby erase 14 out of 17 bad debts through the dispute process sot hat when we were getting qualified for a house we were in the clear.

   Discuss when you’re going to purchase a home. How much to put down? Heck, WILL you purchase a home? Thats up for grabs these days.

   What are your personal philosophies towards paying bills? You would be surprised how this differs. One likes to pay ON the due date, the other faithfully pays 2 weeks before the due date.

   I could go on and on…lol..I’ll just add to this in a separate post.

4. Brett McKay on 16.01.2008 at 10:33 (Reply)

   Adam-
   Good point on the prenup. I’ve written my take on this previously here: http://www.frugallawstudent.com/2007/07/04/personal-finance-advice-from-kanye-west-%e2%80%9cif-you-aint-no-punk-holla-%e2%80%98we-want-prenup%e2%80%99%e2%80%9d/

5. Brett McKay on 16.01.2008 at 10:35 (Reply)

   Ginger-
   Excellent additions! Thanks!You should write a post up at Girls Just Wanna Have Funds with your additions. I’d love to read.

   P.S.
   Thanks for the link in your blog roll. I’ll get you added to mine this weekend.

6. Jamie on 17.01.2008 at 16:57 (Reply)

   Though we talked about a budget before we got married, what REALLY worked well for my husband and I was to watch our money for the first three months of marriage and then REFINE our initial budget. We found places we could cut back (like movie rentals), and other places where we needed to spend more (like groceries). We also had a better idea of how each of us spent money, and where our priorities were.

   We try to review our budget every few months as our lifestyle is constantly changing (raises, new jobs, new school schedules, changing hours, rent hikes etc.).

7. Emily Starbuck Gerson on 18.01.2008 at 11:02 (Reply)

   That’s a great post. My boyfriend and I are talking about moving in together, and I’m definitely worried about how the finances will work. Thanks for the ideas!

8. Girls Just Wanna Have Funds: A Personal Finance Blog About My Journey To Financial Freedom on 19.01.2008 at 04:11

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9. Prosper Roundup — Prosper Blog Gets a Page Rank Edition on 20.01.2008 at 11:55

   […] The Frugal Law Student discusses Personal Finance Tips For Newlyweds […]

10. Writer's Coin on 28.01.2008 at 15:50 (Reply)

    My fiancée and I moved in together around 10 months before our wedding (coming up in May).

    All moral issues aside (which I understand and can empathize with), this was the best decision we could’ve made. Although we don’t share a bank account just yet, we do split all the bills down the middle and so we have had many of these discussions, we have a budget, and we have an idea of when and how we’re going to buy a house.

    This is only one of the many advantages of living together before marriage, of course.

11. Brett McKay on 29.01.2008 at 10:03 (Reply)

    Writers Coin-
    Thanks for your input. While I don’t agree living with your future spouse for moral reasons, I can see how it would be a good way to prepare for some of the more practical aspects of marriage like handling finances with another person.

    P.S. You’re blog is great. I’ve found it really useful.

12. david on 06.03.2008 at 11:56 (Reply)

    A bit more on prenups, for anyone interested.

    Google Answers has an excellent write-up on the validity or enforceability of prenups, especially when the pre-nup is drawn up informally.

    If you’re interested, you can look it over at:

    
    Court cases relating to Pre-Nuptial Agreements

    .

13. College Students need to learn about money - Richmond Regist… | FD on 21.03.2008 at 07:12

    […] Personal Finance Tips For Newlyweds […]

14. Mortgage Broker on 15.07.2008 at 08:34 (Reply)

    Ah moving in toghther and then finding out your partner has a bad credit record, this is always going to be a hard thing to cover as it can make or break the relationship.

15. Online Credit Counseling on 14.08.2008 at 20:29 (Reply)

    This is some really great advice. Coming up with a budget is something I think most people just ignore and I have been guilty of this myself. Sometimes I think people find it easier to ignore their spending habits.

16. save and go green on 19.08.2008 at 05:36 (Reply)

    It is really important than both you and your partner are on the same page when it comes to finances. I would have a hell of a marriage if my wife and I didn’t have the same financial goals. The credit score may seem like harsh thing, but it’s something you need to know even before you get married to a person.

17. Peter Answers on 19.08.2008 at 16:45 (Reply)

    It starts with planning for the wedding. In fact, it starts long before then, and often times before you even know each other. I recently met someone who already has her wedding planned out down to the smallest detail (at current prices were are talking $30k+) and SHE DOESN’T EVEN HAVE A BOYFRIEND. Anyone who spends more than a grand or two is foolish and pissing money into the wind. Bad way to start a lifetime journey.

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