Marriage changes many things, above and beyond your lifestyle, and much of it is directly tied to your financial situation. Whether you’re in the middle of planning your wedding, newly engaged, or just beginning to discuss marriage with your partner, it’s never too soon to be on the same page about your finances.

It’s not as simple as the fact that you are living together and sharing expenses, but also that your legal and tax status changes too. While it is definitely NOT the most exciting pre-marital activity, I strongly believe that you should start these discussions and, generally, the good habits of talking about money early on in your relationship.

You know the old expression “money can’t buy happiness”? That may very well be true, but just talking about money can go a long way. By having these important discussions early on, you can avoid unpleasant surprises because past mistakes can affect your future together. At least, if you go in with your eyes wide open, you better know what to expect and how to plan accordingly.

It’s important to get to know each other’s financial situation, like how many credit cards you each have and how you like to spend your money, for example, before you walk down the aisle. The decisions that you and your future spouse make now about how to handle money will have long-term repercussions for you, whether you decide to combine your finances completely or keep certain things separate.

In addition to discussing how many credit cards you currently have, you both need to be completely transparent about all outstanding debts, as well as your assets and credit reports. You should sit down together and make a list of all your personal debt, like student loans, credit cards, personal loans, etc. then decide if you would like to consolidate them or not. You should also have a good grasp on your partner’s spending habits so that you have a more complete picture for future decisions.

There are numerous financial planning tips to help you stay on track as you plan your new life together.

First and foremost, you should ensure that you are both on the same page by discussing your short and long-term goals. This is a process you would likely do individually before, but now, you will need to have some in-depth discussions about your visions for the future and determine how you will get there together.

This will include discussing important discussions like retirement, saving, monthly budgeting, and emergency savings, among others. Decide how you will handle big purchases, for example, and whether you need to consult with each other for purchases over a certain dollar amount.

Whether you’re joining expenses or maintaining separate accounts, or a combination of both, there is no right or wrong. The key is to determine who will pay what and from which account and how you would like to split responsibilities for paying monthly bills, the mortgage or rent, or car payments, for example. No matter how you decide to do this, it’s important to keep a credit card in your name so that you can maintain individual credit histories. It still frequently happens that women find themselves divorced or widowed, and they don’t have a credit score of their own, thus complicating what is already a difficult time. 

It’s important to learn the local laws regarding marital property and understand how assets and liabilities acquired before and after marriage will be shared. Once you have a better sense for your individual asset and liabilities, you should really discuss whether a pre-nuptial agreement makes sense, particularly if one partner has considerably more assets or earning power than the other. A pre-nuptial agreement is simply a legal document that sets expectations for the division of assets should a couple divorce.

Women tend to be getting married later in life. In fact, did you know that today, the average age that Indian women marry is 22, up from 18 years old less than a decade ago? This means that individuals are accumulating more assets and debt than ever before, making pre-nuptial agreements much more prevalent than they used to be.

While it can be a difficult conversation for some newly-engaged women to have, it’s important to remember that these discussions set the foundation for your future. A pre-nuptial does not mean that you think divorce might be in your future – of course, we all enter marriage hoping for a happy ending together. It’s important to think about how you will both protect your assets considering an unfortunate event, like death or divorce, for example. And, if you are going into the marriage with a former spouse or children from another marriage, pre-nuptial agreements are particularly prudent.

Other top financial planning tips for newly-engaged or married women?

• I really recommend that you book a monthly date to review your budget and finances, go over credit card statements together and correct any errors, if necessary.
• Look at things like your health and other insurance policies to ensure they meet your needs and determine the most economical and comprehensive policy to go with.
• If you have any debt, now is the time to develop a plan to reduce or eliminate that debt as quickly as possible. One spouse’s debt does not automatically become the other’s debt upon marriage, but that debt can still affect you after marriage, as it affects your joint finances.
• Check your credit scores and, if either of you has a poor credit rating, come up with a plan for improving it. You might consider being co-borrowers and use both of your assets to qualify for a loan or mortgage, for example, when the time is right.
• Now is the perfect time to update or create a will, if you don’t have one, to discuss important things like a power of attorney, and to update your beneficiary on policies.
• Lastly, ensure you have a plan in place to regularly review your financial plan to ensure you are still on track to achieving your goals and to adjust accordingly.

No matter what, plan to start your marriage on the right foot by sharing in all the financial discussions and decisions now so that you are always in the know and prepared for whatever eventualities life brings your way.

I hope this podcast has provided you with some valuable insight into some of the key financial planning tips to keep in mind as you enter this exciting and monumental time of your life. 

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