5 Things Soon-To-Be Married Couples Need To Discuss To Avoid Financial Conflict

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Many people enjoy talking to their partner about a lot of things, but money is a tricky subject. While discussing finances isn’t always fun, it’s necessary because money troubles are why couples split up. According to a survey from Debt.com, 1 in 3 marriages end over credit card debt, and out of those who blame credit card debt for divorce, 7 in 10 say that they or their ex-spouse concealed debt, while 8 in 10 say they or their ex secretly overspent. 

Resentment over debt and spending habits can destroy a marriage, but it doesn’t have to. Before saying I do, here are five things to discuss with your partner to avoid financial conflict, per Kristin Wilkerson, CTFA and Wealth Advisor First Interstate Wealth Management. 

Assets and Liabilities

Learning your spouse has massive debt is something that should be talked about before walking down the aisle. 

“‘Oh, by the way, I have $100,000 in credit card debt,’ is not something you want to hear before leaving for the honeymoon,” Wilkerson explained. “Understanding each other’s assets and liabilities before the wedding is essential to avoiding future conflict.

“This is also a perfect time to share and understand each other’s relationship with money. By creating a new collective balance sheet and checking in regularly with each other, planning for the future can be done transparently and effectively.”

Decide on Joint or Separate Accounts

The decision to share a bank account or keep finances separate is a big one and depends on many factors, such as financial goals, independence, and more. The good news is couples aren’t forced into a solution. Navigating finances is a personal choice for couples, but it’s important to be on the same page from the beginning to prevent misunderstandings. 

Wilkerson suggests meeting with an advisor who can give a clear, unbiased perspective and consider different options. “Depending on the couple’s financial habits, a mixed approach can be considered, in which a joint account pays for shared expenses and separate accounts are used for personal wants and needs,” she noted. 

Establish Long-Term Saving Goals 

Many couples have big dreams like buying a home, starting a family or going on a bucket list adventure. Whatever it is, planning the financial steps to reaching that goal should be discussed. 

“Opening an account dedicated to consistent savings can help couples reach their goals and serve as an emergency fund for unexpected life events,” Wilkerson noted. “No matter the ages of the couples and the goal, it’s never too early or late for newlyweds to pad their retirement nest egg. For those with a workplace-sponsored retirement plan, such as a 401(k), electing to make contributions is the easiest way to build savings.” 

Review Insurance and Beneficiary Information 

Another touchy conservation to have is life and health insurance and beneficiary details. It’s not something most want to think about, but it’s important in an unforeseen circumstance. 

“Evaluate your soon-to-be-spouse’s benefits like health insurance, as some coverage plans including dependents could be more affordable than having separate plans,” said Wilkerson. 

“Additionally, employers may offer life insurance and beneficiary information should be updated to ensure a surviving spouse is considered.”

However, it’s not only insurance that needs to be considered; retirement accounts with beneficiary designations should also be addressed. 

“If couples have significant assets, consulting with an attorney is recommended to ensure assets are titled properly and documentation — wills, trusts, and powers of attorney — is in place,” she said.

Evaluate Important Financial Values 

It’s vital never to assume you have the same financial values as your partner because things can take a wrong turn quickly, so talking about where you stand is crucial. 

“Similar to discussing financial approaches for savings and liabilities, talking about providing financial support to family or friends is an important issue to review in order to be on the same page before an event may arise,” Wilkerson explained. “Opinions can vary greatly on this topic, so understanding each other’s belief systems around financial support can help reduce unexpected tensions in the future.”

Talking about money doesn’t need to be more stressful than it already is. Debt can cause friction, so sticking to a good financial plan, open communication, and finding solutions instead of critiquing is a great path to success.

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