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Ready to tie the knot? Here are the crucial financial items you two need to discuss now so you'll get your marriage and money off to a fantastic start!
Newlyweds and Money: What You Need to Know
Marriage and money can sometimes be complicated, stressful, and tricky when you're not on the same page.
Ideally, you'll have the conversations before you tie the knot, but even if you've been married for years it's possible to get on the right track together.
This week I was invited to join in on chat hosted by Experian talking about Financial Tips for Newlyweds.
We covered a lot of ground.
Everyone discussed from personal experience and from what they've seen with other couples big issues and questions that come up when you're married such as:
- key financial items couples should discuss
- financial information should married couples know about each other
- advice for newlyweds
I want to share just a few highlights with you.
Hope you enjoy!
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You can catch Zina and how she became debt free in 3 years at Debt Free After Three.
Resources to Merge Money and More
If you're looking tips, stories, and advice to make merging finances easier, here are a few to check out!
- Best Budget and Money Apps: Personal Capital, Tiller, Mint
- Automatic Saving: Qapital
- Jumpstart Your Marriage and Your Money: Amazon | iBooks | Barnes & Noble | Google Play | Smashwords | Kobo
Key Financial Items NewlyWeds Should Discuss
Christina Roman: What are key financial items couples should discuss in the first few months of their marriage?
Elle Martinez: A big, big thing is defining what's important to you. What's that big thing you guys want to work towards?
I've interviewed a lot of couples that have done some crazy, extraordinary things with their finances, like becoming debt-free and retiring early. And they said that made all the difference because before they were living paycheck to paycheck.
Before, they were trying to do everything and they were getting nothing done.
I think couples should sit down and see, like, what's that big goal for you? People say retirement. What does that mean?
You might find that maybe your big goal together is traveling more. Or it could be maybe you want to start a business together, but you won't know until you start having those discussions.
Once you start having that, it's much easier to work backward and say, well, how are you going to make the finances work?
Christina Roman: So kind of prioritize finding, figuring out your goals together and then prioritizing how you're going to achieve them.
Rod Griffin: So I think that's a great point. Goal-driven discussions are so much more positive than having an argument after the fact. Why did you buy it kind of late now?
But is in retirement is so far away, especially if you're married and younger and so to talk about. Yeah, we all have that goal. What are the do you guys think, are near-term goal discussions are more helpful?
Zina Kumok: My husband, I got married and we didn't we weren't ready to buy a house, but we were ready to move across the country and started a new life. And we'd already been talking about that during our engagement. So that was something that we'd already started saving for together.
And we had merged our finances during that time before we got married. And now that we are ready to buy a house, we started that discussion of, well, what do we want to buy? You know, how much do we need? And we started that process.
And I think you can't start saving until you get down in the nitty-gritty of it. This is the kind of house you want to buy. This is the neighborhood, you know, or this is where we want to move. This is what it's going to look like to get there to live there.
You know, you can't really save well until you know the specifics of it, because then you're just kind of. Walking around blind and not knowing what you're gonna do.
Prioritizing Your Goals
Christina Roman: Yeah, that's a really good point, because then you have a really good idea of how much you need to see.
I was talking to my husband this weekend about. I like my house. Where do you think you'll in California, because my dream eventually is to move back to Colorado, and that's something I've slowly warned Josh up on that idea.
But it's like, so do we want to get a house in California? Do you want to wait? What are you going to eventually do?
You know, what is what is the overall plan? And so once you have that kind of figured out, then you can definitely start to make realistic, hard goals for first setting aside money or figuring out how to get out of debt.
Elle Martinez: Yeah, I think it makes it easier to when you know what you guys are working towards to make decisions on what not to spend. And it doesn't feel like a sacrifice. You know, where you feel like, oh, I'm the victim. I can't do all the stuff I want to, but rather I'm making a choice not to spend here because I really want this.
And I think it puts you both on the same side, both on the same team. And even if it's a so-called smaller goal, I mean, marriage. It's a happy marathon, hopefully, but it's not a sprint.
So to get into the habit as soon as possible of working together and having that one, I think is more important. And then you can always tackle the bigger, bigger goals later.
Merging Finances and Your Lives
Christina Roman: So when they're having that really important financial discussion, what things should they ask each other? What should they lay out on the table?
Elle Martinez: I think if you're talking about merging lives and as you get closer to that, I really think you should almost put everything out there because of financial fidelity is a huge issue. It's a serious issue. And once you're married, a lot of your finances are going to be tied together.
So it's best to know ahead of time what you're dealing with. And I know sometimes that's intimidating. But start off with the day to day expenses and the accounts that you guys are gonna be dealing with.
And then you can talk about if you have any retirement accounts and so forth. But you really do. If you're going to share your life together, you have to be able to talk about your finances together.
Rod Griffin: Yeah, I think I have. I was on a periscope. The other thing was the periscope did it.
And somebody jokingly said that, you know, he has a he just keeps a secret account. And, you know, it's like, yeah. And that's a con. There was a study that showed that, too. And it's, you know, pointing up if you live in a community property state.
Let's say a joint property loss in many cases accounts when you open them are automatically joint. So his he was kidding. And but I've seen this and I hear from people.
But you open get your credit reports because it's automatically joint would appear on your spouse's report anyway. And we don't find out.
So, you know, those financial secrets are more bring down a marriage and you just eventually you will find out because you're going to get into stress. You're going to it's just you cannot have financial secrets.
Rod Griffin: I mean, you know, you have a secret birthday gift account or you can't. You know, that's a different having secret accounts, secret nature accounts. And so it just if you're hiding that kind of information is probably something else going on, too. I mean, I just I've just never seen it go well.
Zina Kumok: Right before I got married, Parker told me that she had a secret, a divorce account just in case her husband ever left her or she needed to leave him. She had that money and she advised me to do the same.
And I had all, you know, a prenup is one thing, but keeping a secret stash just in case. I mean, like you said, Rod. A state might say, you know what, that's.
That's both of your money if you earned it while you were together and why can't you talk about it? Or why can't you say, you know, this is something I have just in case for I don't know…. I think starting off on that foot is really dangerous.
Christina Roman: I wanted to know what is some common mistakes couples make when combining their financial lives?
Elle Martinez: I think we kind of hit all of them.
The biggest one is like there's no priority. It's like they have 10 priorities, which means their money is going everywhere, not doing anything.
I'd say the communication, like people say, we have to have money talk.
I think that's something I'm passionate about. I feel like I don't have the talk. It's too intimidating. It's too scary. And I can't imagine anyone being excited when they're like. Honey, I need to talk when you hear those words, get you tense up.
I suggest going on many dates, having something regular for you guys to talk about your goals and how the finances work with that. And then I guess the last thing is like they don't have a system in place. You know, we have so many great apps now, tools for budgets.
I mean, however you want to do it, but automate your money, go into those goals that you guys came up with. That way you have guilt-free spending on what's leftover and you feel like you have accomplished something awesome.
Zina Kumok: Zina, do you have any just mistakes that you want to help people to avoid?
Zina Kumok: Yeah, I think one thing. You know, it's easy to if you come in with your each person comes in with their own ideas of how money should be spent and you're too rigid. I know.
I think as a personal finance writer I have very set ideas of how money is spent. And it's really hard to change your mind and to soften in a compromise.
And I think that's really important. And. Is as well versed as you think you might be if your voice at this person has their own background, their own family history, their own identity.
All these opinions that are informing how they spend money, how they look at it, and it's just as valid as yours. And I think automatically discounting something because it's not how you do it. It's a really dangerous precedent.
Christina Roman: hat's a great point. What about you? Do you have any?
Rod Griffin: You know, I agree. I don't like the money talk. And my wife and I get to a point where we don't have the money talk. We just talk about money as a matter of daily. Recourse if we're saying one of us thinks about doing something and we need to go do something.
You know, the most challenging money issue that I can remember is having us.
All right. If we got married, was that emergency fund. And getting that together and it took us six months to get a thousand dollars saved and set aside and once were there.
And that was because my wife was so used to having so little and budgeting to the penny and then being, you know, you would spend everything that was there. And so we had overcome that once we got that emergency fund. And we still do that to this day. We still have that thousand dollar emergency fund is one fund. And then we have other you know, that's in it. Frank, it's a checking account. Zero.
We get a thousand dollar zero that register used to. So it's always there. And I sort of out of sight, out of mind. But when we talk about money now, it's just as a matter of course, we think that going somewhere, doing something that going to dinner. You know, Christmas is coming. What are we going to do? How do we budget for that?
Hey, we want to go do X or Y or Z. Let's talk about how we save for that. So it's it's not always goal-based. And it's not always structured that way.
You know, it's not a structured conversation. We want to do something together. Whatever it is. Maybe it's next week, maybe it's two years from now. And also, that's okay.
Here's where we are, what we need to do and what we do not need to do. And it's just a conversation. Yeah.
Christina Roman: And I think the one thing that just my own personal advice.
The one thing that I've found that works for myself and my husband is just being open and honest with each other right down to the point where we have a whiteboard that has our bills on the side checking off every time we pay a bill has our debt so we can see like our debt kind of going down.
So we update that every single month and that has been helpful. And then just not keeping secrets from each other and not waiting for things to like get to the point where you're going to blow up.
Yeah, sure. That if they're doing something that's bothering you, maybe in a shorter day if you have them because you don't want to let things build up and then come at them guns blazing like you do this. You do this. You do this.
And then it's like, wow, okay. I did not realize I did all of that. So making sure that you have that, you know, you do have those conversations.
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This episode was originally released in June 2017. Show notes have been updated August 2019.