Money Management Tips for Engaged Couples

Getting engaged is the first step in making a lifelong commitment to someone. Beyond wedding planning, it is important to know how to talk about managing money in a relationship. There are a number of financial questions to ask before marriage and having these talks now can ensure you’re both on the same page. Studies have shown that finances are the top cause of arguments among couples,¹ so the sooner you have these discussions before marriage, the better.

First and foremost, let your fiancé(e) know you want to have a conversation about your current financial situations, financial decision-making, budgeting as a couple and financial planning for the future. Agree on a time to have “the talk” so you can both come prepared with a list of goals and priorities. Remember: Honesty is key.

Financial Planning for Engaged Couples

Use these financial tips as steps to outline how to talk about money with your partner.

1. Tell Your Partner About Any Outstanding Debts
   Be honest about any outstanding credit card debt, student loans, car loans or personal loans that you each may have. It would also be wise for each of you to get a free copy of your credit report and share them to ensure complete financial transparency.
   
   Once all of your debts have been disclosed to one another, you can start brainstorming a debt payoff plan. While some newlyweds decide to combine their resources and work together on paying down the debts with the highest interest rates first, others believe that the person who built up the debt should pay it off.
   
   Whatever financial decisions you make while budgeting as a couple, be sure that you’re both in agreement and that you’ll stick to the plan once you’re married.

2. Decide on Having Joint vs. Separate Bank Accounts
   How should couples share finances? Should you create a joint bank account or keep separate bank accounts? On one hand, having joint bank accounts can help with money management and household bills. But on the other hand, separate bank accounts offer a certain sense of independence.
   
   Traditionally, couples will merge their bank accounts. If one partner makes substantially more money in the relationship, it can make sense to have joint accounts for ease of bill pay. Additionally, if one partner is particularly good at managing the bills and the other partner doesn’t enjoy those tasks, then joint accounts are recommended.
   
   Sometimes, however, there are reasons to not have joint accounts. Having separate accounts allow couples to maintain more independence, while still having access to a joint account. For example, if one spouse is self-employed and needs to maintain a separate business account, not merging all of the accounts would make sense. Or, if you like surprising your spouse with trips or gifts, you may want to consider separate accounts so that they can’t see all of your purchases. However, even with separate accounts, couples will still typically create additional joint bank accounts for mutual savings and bills. In fact, according to a TD Bank Survey, 47% of married couples merge their spending and accounts after getting married. The majority (57%) share bank accounts, while two-thirds share at least one credit card.²

3. Budget for Life as Newlyweds
   Now that you’re engaged, you’ll need to start budgeting as a couple as you plan your wedding. But beyond that, there are day-to-day living expenses and a division of bills you’ll need to make clear. Make a list of all debts, household expenses and individual expenses, decide how you’re going to divide it up and stick to that plan.
   
   Whether you have joint or separate bank accounts, you’ll still need to decide from which account bills will be paid, and automate it to ensure no payments are missed. Some couples split bills evenly, while others may divvy up shared expenses based on income. After looking at all of your debts, expenses and incomes, divide the bills in a fair, sustainable way.

4. Discuss Your Financial Future: Lifestyle, Children and Retirement Start by calculating how much each of you can save each month — it’s important to have an emergency fund for unexpected expenses as well as a separate savings fund that you can use for large purchases, such as the down payment on a house. Having funds set aside to handle all of life’s ups and downs helps to keep your finances stable as you grow as a couple.
   
   When it comes to these areas, you can dive into deeper discussions, such as having kids, investing and retirement. From there, talk about what you each value and work together to develop concrete steps on how to achieve these future financial goals.

Smart Financial Planning Can Keep Your Marriage Happy

When it comes to financial decisions, there isn’t always a right or wrong, but there is trust and transparency. Whatever you agree upon, stick to it and always keep your partner aware of any changes to your financial situation. Getting married to the love of your life is supposed to be fun. So be proactive, get your financial priorities in line, and make sure you and your partner are in agreement.

This article has been updated from its original posting on September 19, 2019. Melina Duffet contributed to this post.