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Before you walk down the aisle with your beloved, it’s a good idea to do some financial planning together. Check out our financial planning before marriage checklist to ensure future money woes don’t take away from your wedded bliss. 

To-Do Before You Say ‘I Do’

  1. Be Transparent About Your Current Finances
  2. Decide What Responsibilities You Will and Won’t Share
  3. Research Community Property Laws in Your State
  4. Make a Plan For Your Debt
  5. Have Regular Money Talks
  6. Make Your Money Plans Official

1. Be Transparent About Your Current Finances

How much does your partner know about your current finances? If the answer is not much, it’s time to do a little show and tell. 

Things to show your partner can include your:

  • Salary and benefits
  • Bank accounts and balances, both checking and savings
  • Retirement accounts   
  • Investment portfolio.
  • Credit card and personal loan debt
  • Credit report

What if we don’t want to be transparent?

If you decide not to be transparent about your finances, it’s essential to discuss that decision as a couple. It’s also good to understand your motivations regarding this choice. 

Are you trying to hide something you are ashamed of or is sharing simply unnecessary because you wish to remain financially independent?

The level of transparency required can depend on what financial responsibilities you plan to share, but keep in mind that it can be hard to determine what should be shared without some knowledge of each other’s finances. For that reason, you may decide to swap the order of steps 1 and 2 on this list.

2. Decide What Responsibilities You Will and Won’t Share

After you and your partner catalog what you each can bring to a marriage, it’s time to decide what financial responsibilities you’ll share.

A few important questions to ask:

  • Will we open a joint bank account?
  • How will we handle shared, variable expenses?
  • Will we maintain separate checking and savings accounts?
  • How will our paychecks be deposited, and how much will go into each account?
  • Who will be responsible for paying each shared bill?
  • Do we plan to buy property together?

If you feel overwhelmed by the logistics of merging finances, working with a financial advisor can be helpful.

What if we decide not to merge our finances?

Many couples decide they shouldn’t merge finances. Make sure you look into the tax implications of filing separately.

Even couples who file separately have some shared financial responsibilities at minimum related to housing expenses. So you’ll need to clearly define how those expenses are shared and demonstrate to your partner that you can hold up your end of things. 

3. Research Community Property Laws in Your State

If you live in one of nine states with community property laws, you should know that all income earned by either spouse during marriage, as well as property bought with that income, is considered community property, owned equally by both partners.

Likewise, all debt taken on during the marriage is also shared. 

Community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. (In Alaska, spouses can sign an agreement making their assets community property, but few people choose to do this.)

If you stay married, this is likely not an issue, but if you do end up divorcing, it can significantly impact the outcome. 

4. Make a Plan For Your Debt

According to a study by Ramsey Solutions, 86% of couples married in the last five years started the marriage in debt. To make matters worse, the study found that couples with higher debt burdens were more likely to argue about money. 

If you are starting your marriage with one or both partners in some form of debt, it’s important to have a plan.

You should:

  • Calculate how much debt is owed by each partner.
  • Determine how much money you can afford to pay toward your debt each month.
  • Look for ways to consolidate or save money on your debt with a lower interest rate.
  • Set a timeline to repay your debt.
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5. Have Regular Money Talks

Talking once a week or a few times a month can help ensure you are on the same page with your finances. Regularly talking about money can lead to better communication when financial emergencies do happen.

6. Make Your Money Plans Official

Once you have laid the groundwork for your financial future as a couple, you may decide to make it official with a prenuptial agreement. A “prenup” is a written contract where an engaged couple states their rights and responsibilities regarding premarital and marital assets and debts and what would happen should their marriage end in divorce or death.

A lawyer can help you create your prenuptial agreement and have it notarized. However, prenuptial agreements could still be valid in state court without notarization, provided both parties can prove it was signed voluntarily.

Bonus Tip: Don’t go into debt for your wedding! 

Tempting as it may be to take on debt so you can have your dream wedding, starting a marriage in debt may not be the best approach. Check out our blog about wedding debt, why it’s not worth it, and how you can avoid it

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