July 14, 2024
Here Are 6 Money Moves You Must Make When You Get Married

Tying the knot is a big decision for any couple embarking on a new life together–but it’s especially significant when it comes to money matters. 

You’re not just choosing to spend the rest of your life with someone. You’re also choosing to share–or not share–your finances with them. That part can be tricky. 

According to experts, when it comes to matters of the heart, always use your head.

“When couples get married, there are several key financial moves that I’ve found essential in protecting individual finances and ensuring a smooth financial partnership,” said Michael Ashley, finance expert at Richiest.

Here’s how these experts weighed in on their top recommended money moves to make when you get married.

1. Discuss a Prenuptial Agreement

According to Ashley, you should discuss and potentialy draft a prenuptial agreement. Especially if either partner with significant assets, debts or children from a previous relationship. 

“A prenup helps to clearly define how assets and debts will be divided in the event of a divorce, offering peace of mind and protecting individual financial interests,” he said. “I’ve seen how having this agreement can prevent future conflicts, and it’s important to work with a lawyer to ensure it’s fair and legally binding.”

Diane Bourdo, certified financial planner and president of The Humphreys Group says this is definitely a discussion to be had.

“Prenuptial agreements, once thought of as only for wealthy men entering a second or third marriage, have become commonplace for couples that want to protect not only their finances but also their assets and liabilities.” 

Prenuptial Agreements and Older Couples

“With more and more people over fifty entering marriage, it’s more important than ever to consider the legal implications of tying the knot.” 

“Getting married later in life often means that you and your partner have already accumulated wealth, assets, and debts, which means you have more at stake should the relationship end up not working out,” she added.

Misconceptions about Prenuptial Agreements

“Signing a prenuptial agreement before saying ‘I do’ doesn’t mean you lack faith in your relationship,” Bourdo explained.

“Rather, it is an important document that can provide financial protection for both spouses and clarity on complex issues such as debt, asset distribution, and inheritance rights.”

She noted that while many people see entering into a prenuptial agreement as pessimistic or unromantic, it shows respect for your partner. Furthermore, it ensures that each person has their needs taken care of should anything happen down the road that would lead to separation or divorce. 

Benefits for Women Over 50

“Especially for women over fifty, a well-crafted prenup can provide peace of mind now and protection later. With its various benefits, it’s worth exploring a prenup before taking the plunge into matrimony–even if it just means being prepared for any eventuality.”

2. Decide How You’ll Manage Day-To-Day Finances

“Couples need to decide how they will manage their day-to-day finances,” said Ashley. “Each method has its advantages.”

He said there are three main approaches: keeping finances completely separate, merging everything into joint accounts, or adopting a hybrid method with both joint and individual accounts. 

3. Choose Separate Accounts

“This approach can be beneficial for maintaining financial independence and avoiding conflicts over spending habits,” said Ashley.

“It requires clear communication and meticulous tracking of shared expenses, which can be managed with tools like shared spreadsheets or joint credit cards for household expenses. However, it can be cumbersome and might not optimize family finances, especially if one partner has significantly higher earnings or debts.”

4. Open Joint Accounts

According to Ashley, merging finances into joint accounts simplifies budgeting and bill payments, making it easier to track household expenses. 

“This method promotes transparency and can foster a sense of unity in working toward common financial goals.” 

However, he said it requires mutual trust and can lead to conflict if one or the other partner has different spending habits or financial priorities.

5. Have a Combined Approach

“Using a combination of joint and individual accounts often provides the best of both worlds,” Ashley noted. “Joint accounts can be used for shared expenses and savings goals, while individual accounts give each partner autonomy over personal spending.” 

He said this method requires setting agreed-upon amounts to be transferred into personal accounts, which helps to prevent conflicts over discretionary spending.

6. Consider Updating Estate Plans

In addition to choosing how to manage day-to-day finances, Ashley recommends that you update estate plans and review the beneficiaries on your financial accounts. 

“Life insurance policies, retirement accounts, and other financial assets should have updated beneficiaries to reflect the marriage.”

He says this ensures that, in the event of a tragedy, assets are distributed according to your wishes. “I’ve worked with clients to create or update wills and trusts, and it’s been essential in protecting both partners and any children involved.”

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