The Ultimate Guide to Handling Newlywed Finances

One of the biggest causes of marital discord is disagreement over newlywed finances. However, you can help prevent problems before they happen by having a clear understanding and agreement of how your finances will be handled – before you get married!

Many engaged couples will sit down with a pastor or premarital counselor to go over these topics. Some couples even choose to go through financial programs like Dave Ramsey’s Financial Peace University together to plan and prepare for marriage. But no matter how you choose to do it, the most important thing is that you communicate.

In addition to combining finances, newlyweds will also need to contend with joint tax filing, budgeting, and other financial planning issues. Read on for a list of essential questions to ask as a couple!

1) What are our financial goals and priorities?

After the wedding is over and the guests have gone home, it is time to begin building your new life together. This is an exciting time to dream and plan together. Dreams that once seemed impossible or unattainable without a second income to achieve them with or a partner to enjoy them with are now within reach.

Every couple is unique and will have different dreams and goals. Are you going to save up a down payment for your first home, or is traveling the world your top priority right now before settling down and having kids? Will you tithe to a local church, or do you prefer to donate your time by volunteering?

Hopefully, you’ve been having these kinds of daydreams and conversations together before getting engaged, but if you haven’t – now is the best time to start. What may have been entertaining to watch other couples fumble over on the Bob Eubanks Newlywed Game, isn’t so fun when it happens to you in a serious conversation.

Not knowing your spouse’s views on such important things as how they prioritize saving or who will work after the children are born – can be very damaging to your relationship.

2) How will things shift and change in both our financial situation and our careers when we start having children?

You don’t want to find out ten years into the marriage that your spouse was just assuming you would take over the financial burden so they could homeschool when you were planning on both of you having solid careers to pay for private school. Discuss and set the expectations now so there won’t be any surprises along the way. 

Priorities do change, and you both should remain flexible enough to handle such differences of opinion with love and respect when they do arise. And rest assured, no matter how in love you may be – over decades of marriage – it WILL eventually happen to you. But laying the groundwork for respectful conversations now will make it easier to get over those inevitable hurdles later on.

3) Will we maintain a joint bank account, separate accounts, or both?

There are many ways to combine your finances as newlyweds. Some couples prefer to close all individual accounts and immediately open joint checking and savings accounts. Others choose to maintain individual checking accounts for various reasons, such as better tracking of self-employment income and expenses.

And still others like to have one main joint account and individual checking or savings accounts for their own personal projects or hobbies. Although every expert has an opinion on what couples “should” and “shouldn’t” do – there is no right or wrong answer. Simply put, the right answer is the one that works for you. 

Sub Question: What about credit cards? How much debt are we bringing into the marriage?

If either of you has any debt from before the marriage, now is the time to be upfront about it. It is a good idea to find out what your total amount owed is and make a plan to conquering it together. This includes any student loans, mortgages, car loans, and credit cards.

And whether you decide never to touch another credit card again, or you enjoy racking up airline miles or hotel points together, you will have to discuss what your policy towards credit cards will be. Some couples choose to avoid acquiring debt at all costs and only pay cash for everything – including cars and even homes. 

4) What will our budget be, and what budgeting system will we use?

Perhaps the most important part of newlywed financial planning is determining your budget and deciding on a budgeting system. Nothing forces you to work together and communicate quite like budgeting.

There are many ways that couples can choose to keep track of their monthly spending, including an envelope system with cash, an Excel spreadsheet, or even a budgeting app such as Mint or EveryDollar. Some banks even have a budgeting tool built into your online account access.

You may need to try a few before deciding on the one that works best for you. You will also need to decide if you will both sit down together every month to pay the bills or if one spouse will take on the responsibility.

Learning to include someone else in your household budget can also be a challenge. Remember to communicate and compromise as you keep your shared goals in mind.

If you have never budgeted before, it can be an intimidating or even disappointing experience as many people feel instantly “broke” or “restricted.” But just remember that a budget is there to benefit you and ultimately help you build wealth. “Budget” doesn’t have to be a dirty word!

5) Do we want to implement the concept of “fun money” for personal allowances? 

One area of the budget where many couples disagree is on individual spending or “fun money.” Most financial fights seem to arise on issues of who spent what and why. One way of avoiding this issue is to have a set amount of money each month that each spouse gets to spend in whichever way they would like. This works well for many couples.

However, some people hate this kind of system as it reminds them of their weekly allowance as a child. This is something you will have to discuss and decide on together. But whatever you choose, remember to make decisions together for the overall good of the household.

You will both need to make sacrifices (financial and otherwise) throughout your marriage to strengthen your commitment to each other and avoid resentment. Make sure you allow for each other’s passions and hobbies whenever possible, and avoid being critical of one another.

6) How will we file our taxes?

As newlyweds, filing taxes for the first time can be very daunting. However, it is likely much easier than you think. Going to a tax preparer such as H&R Block or using guided tax software such as TurboTax can help you through the process. In most cases, couples will benefit the most financially by filing together.

There are, however, some special circumstances where filing as individuals makes the most sense. These include situations where one spouse has an unusual amount of out-of-pocket medical expenses to deduct, or if you or your spouse have student loan payments that are based on income.

A quick conversation with a tax professional can help clear up your situation if you are unsure.

7) How much should we be saving for retirement?

You will want to sit down together and look at the different types of plans available to you. You will want to discuss if you want to utilize an employer’s 401(K) plan, a Roth IRA, or some other means of retirement investment and savings.

For example, if you are both employed, you may choose to contribute more to the spouse’s account, whose employer offers a 401(K) match. Some couples even choose less traditional means of planning for their golden years by investing in real estate properties or by working to achieve financial independence now. The important thing is that you discuss this together now and don’t wait until you’re 45 to start figuring out a plan.

8) Are you a saver or a spender?

We all have different spending styles. Some people prefer to squirrel away all of their money in the bank after payday, and others have trouble not spending all of their paychecks on the first day.

Most of us fall somewhere in the middle, but it is important to know where both you and your spouse fall on the saving/spending spectrum. Many couples never have this conversation until they finally figure out years into the marriage why she wants to hide money under the mattress, and he wants to run to the shopping mall every other Friday.

Having this conversation now will put you many years ahead of the game in your combined financial intelligence. Here’s a neat personal spending quiz you can each take to help you figure out your own personal spending style!

Some lucky couples will both fall neatly in the middle of the spectrum as balanced savers and spenders. This is probably the easiest combination to deal with, but even if you are complete opposites – don’t worry! As they say – opposites attract, and this can still be a good thing as long as you communicate well together.

Since you both bring your own set of strengths to the table, you can balance one another out and help keep each other accountable as you work together to reach a happy medium. It only becomes an issue when you forget that you are a team, and it becomes husband vs. wife instead of husband and wife together vs. the finances!

It becomes a bit trickier when both husband and wife are spenders. Although there may initially be less conflict because you both have the same attitude towards money, you could find yourself ten years down the road and $100,000 in the hole because neither of you ever put a curb on your combined spending.

If this is you, you will need to make sure you work extra hard to budget and overcome the potential pitfalls of this type of spending attitude.

Lastly, if both parties lean towards saving, this isn’t necessarily a bad thing. Just remember to loosen up and have some fun now and then! You may also want to explore where this attitude comes from and if it is coming from a place of unfounded financial anxiety or fear. This brings us to our next question.

9) What attitudes or hang-ups from our childhood are we bringing into the marriage?

If you grew up in an environment without any food in the fridge or with an unstable parent who frittered all their money away at the casino, it is understandable that you may feel slightly panicked going into adulthood about how you will manage your own money.

On the flip side, if you grew up in a rich neighborhood and your family played the “keeping-up-with-the-Joneses” game – you may have a hard time scaling back into the reality of your first modest home and budget as newlyweds. This is all part of having critical conversations with your partner ahead of time and gaining a complete understanding of where they are coming from.

A little bit of compassion and care can go a long way in helping you both work together to overcome these old ways of thinking and forge ahead on a new path as a couple. Remember, the past is the past, and you have the opportunity to create a brighter future for your family, together.

Final Thoughts

Combining your finances as newlyweds can be both challenging and exciting at the same time, but with the proper perspective and a little bit of groundwork, your shared financial future can be off to a great start. So in all of the time and preparation spent on the wedding day, don’t forget to spend some time together preparing for the decades of marriage that await you after you walk down the aisle. 

Keep in mind that learning to manage your finances as a newly married couple is much more than just a one-time conversation; it is a lifelong commitment to work together and communicate often. Adjustments can, and should, be made as you journey through different seasons of life.

As long as you remember that you are now a team, there is no financial hurdle you can’t get past or goal you can’t accomplish together.