What Every Couple Should Know

Getting married comes with a lifetime of financial consequences. These can be positive or negative, depending on how you plan for and understand them.

From wedding expenses to filing taxes to creating a household budget, sharing your financial life with someone takes many forms. Your tax and legal status change after getting married, and your spouse’s financial decisions—good and bad—will have a profound impact on your own finances. To set yourselves up for success, it’s important to spend time discussing your current finances and planning for your joint financial future before getting married.

Full Financial Disclosure Before Marriage

Once you are married, your life will be profoundly impacted by your spouse’s finances, even if you keep those finances separate from yours. Money issues are also one of the top three reasons that marriages end, as noted by a survey of certified divorce financial analysts. To start your marriage on the right foot, spend time discussing finances with your partner before you get married.

You and your partner should both disclose:

• Assets: Savings and checking accounts, investment accounts, retirement savings, real estate holdings
• Liabilities: Loans, including personal, student, and auto loans; credit cards, including how many and what balances they carry; mortgage balances and interest rates
• Credit history: Credit scores and credit reports from all three credit bureaus
• Income: Salaries, as well as any 1099 or cash income

This is also an opportunity to explore differences in your attitudes about money. Talk through questions like:

• Do you automate your savings?
• Does looking at your bank account make you feel anxious or confident?
• Do you find budgeting easy or stressful?
• How much spending money do you think is reasonable?
• What are long-term goals you want to plan for?

Keep this conversation open and nonjudgmental. Start to build a plan for managing your money that both of you feel comfortable with. This should include things like:

• Will you merge your bank accounts or keep them separate?
• If your accounts are separate, how will you handle bills?
• If your accounts are merged, how will you handle personal spending money?
• Do you need to consult each other before making purchases over a certain amount?
• Will you pay off preexisting debts together or handle them separately?
• If one of you has poor credit, how will you rebuild it?

If you have trouble with this discussion, work with a financial planner who can serve as an impartial advisor and help you talk through your options.

Prenuptial and Postnuptial Agreements

As part of discussing finances before your marriage, you and your partner should discuss whether or not you need a prenuptial agreement, or prenup. This is a legal document that outlines how you will divide assets and responsibilities if your marriage ends.

While prenups are more commonly associated with marriages between wealthy individuals who want to prevent an ex-spouse from claiming their assets, anyone can put together a prenup. For example, if you have children from a previous marriage, you might want to use a prenup to safeguard certain investments or savings for them. Or, if one spouse plans to stop working to stay home with kids, a prenup can ensure that their nonfinancial contributions are valued as highly as the other spouse’s financial contributions when dividing assets.

A prenup generally contains:

• A list of both partners’ assets
• A division of which assets will remain with each partner in the event of a divorce
• Guidelines for how property or debts acquired during the marriage will be divided during a divorce
• Plan for how gifts given during the marriage or services performed (such as paying off a spouse’s debts) will be accounted for during property division
• An outline of how alimony will be handled if the marriage ends

If you do not create and sign a prenuptial agreement before your marriage, you also have the opportunity to sign a postnuptial agreement, or postnup. This serves the same function as a prenup, but it is signed after you are already married. However, in some jurisdictions, a postnup may be scrutinized more closely than a prenup because, once both parties have entered into the marriage, a dependent spouse may be coerced into signing an unfavorable contract.

If you do not have either a prenup or postnup, in the event of a divorce, your assets will be divided according to state law where you live. You, your spouse, your lawyers, and the courts will decide things like alimony, child support, and custody.

Managing Debt and Credit Scores

Debts that existed before your marriage are considered the responsibility of the spouse who incurred them. For example, your spouse’s student loans are considered their responsibility, not yours. You may decide that you want to work toward paying them off together, but you aren’t legally required to.

However, if one spouse is carrying significant debt, that can impact your joint living expenses and discretionary income. Regardless of whether you plan to pay these debts together, you and your spouse should make a plan to deal with them as soon as possible.

While the act of getting married doesn’t impact your credit, your credit score can be affected by financial decisions that the two of you make together, such as opening a joint credit card or getting an auto loan together. Your financial life can also be impacted by your spouse’s credit history. For example, if you plan to apply for a mortgage together but your spouse has poor credit, you might be saddled with a higher interest rate than you could get on your own.

Wedding Expenses and Budgeting

Planning a wedding is often one of the first major financial tasks that couples undertake together; in 2024, the average wedding in the United States cost $33,000.

The right wedding budget will vary between couples, but planning your wedding is a great opportunity to practice financial communication, planning, budgeting, and goal setting. Start by discussing your priorities for your wedding.

• Do you want an exciting location, regardless of who can attend? Or do you want to make your wedding accessible to as many of your guests as possible?
• Which expenses (flowers, clothes, music, food, entertainment, photographer) are important to you? Are there any you would prefer to skip?
• Do you want to have a wedding party? Do you consider it their responsibility to spend money on you, or your responsibility to treat them?
• Is having a wedding important to you, or would you prefer to skip the time and expense and go to city hall?

Next, put together your wedding budget. Decide how much you and your partner can afford to spend. If you have family members who plan to contribute to your wedding expenses, find that out early, along with any expectations that are attached to those contributions.

Based on your priorities, make a list of the expenses you will have. Then, begin planning for those expenses with your budget in mind. Start with the expenses that are largest and most important to you, then work your way down the list. As you explore your options, you may need to decide whether you can afford the event you want, need to trim expenses, or want to save for a bigger wedding.

Remember, you and your partner may have very different visions of what a wedding should look like, influenced by family and cultural expectations, socioeconomic background, and the area where you grew up. Planning your wedding together is a chance to practice compromise, communication, and living within your means.

Creating a Household Budget

Whether you plan to combine your finances, keep them partially separate, or keep them entirely separate, you and your spouse will need to establish a household budget. This will allow you to plan for daily expenses, save for emergencies, and pursue long-term goals.

To create a budget, start with your monthly income, then look at your mandatory expenses. This includes things like rent or mortgage payments, insurance premiums, utilities, phone bills, food, and car payments. Figure out how much of your budget these mandatory expenses will take up.

Once you have your mandatory expenses accounted for, the rest of your money is what is available for savings, investments, and discretionary expenses. When planning for your savings and investment goals, consider:

• Short-term goals: One- to three-year time frame, such as saving for a vacation or building an emergency fund
• Medium-term goals: Up to 10 years, such as paying off debt or saving for a down payment on a house
• Long-term goals: Up to 40 years, such as saving for kids’ college expenses or retirement

Decide how much of your monthly net income you want to put toward each type of goal. In some cases, for example, if you have a 401(k) through work, you may not need to allocate additional funds toward your long-term goals.

Once you’ve accounted for your savings and investments, the amount remaining is available for discretionary expenses. These can include things like eating at restaurants or ordering takeout, streaming services, or hobbies. Discretionary expenses may be shared with your spouse, such as going out to a movie together, or individual spending. Take time to discuss what counts as discretionary spending with your spouse, what you each think is a reasonable amount, and how the other’s spending decisions will impact you.

Financial Benefits of Marriage

Getting married can come with a variety of financial benefits, such as lower costs for housing or savings on insurance premiums. These savings can translate into more money for savings and investment goals, as well as for discretionary spending.

If both spouses are working, you are more likely to get approved for things like an apartment lease or a mortgage because both of your incomes are being considered. You’ll also be able to have both partners contributing toward household expenses and retirement savings.

In retirement, you can increase your monthly Social Security benefit if one partner earned significantly more than the other. Married retirees are entitled to claim a benefit equal to 50% of their spouse’s benefit; if the lower-earning spouse’s benefit would have been less than that 50%, claiming the spousal benefit instead means you will have a higher monthly income.

Joint Financial Management

To make the most of these financial benefits in your marriage, it’s important to treat financial management as something both spouses are equally responsible for. Continue to communicate honestly and openly, especially if something in your financial situation changes, such as one spouse changing jobs or the birth of a child. Be prepared to update your budget, savings, and other goals as your life and finances change.

Tackle financial tasks together, such as filing taxes, paying bills, and accessing investment accounts. This ensures that both spouses know what is involved in each task and can handle it if the other becomes ill or otherwise incapacitated. Approaching finances jointly minimizes the risk of financial infidelity by making it harder for one spouse to hide accounts, spending, or debts from the other.

Property Ownership

Property ownership in marriage is determined by the laws of the state in which you live. This can have significant implications for your joint financial well-being, especially in the case of death or divorce.

Most states in the U.S. are common law property states. This means that assets and debts acquired during the marriage belong to the person whose name is on them, rather than automatically belonging to both spouses. Debts acquired by one partner are not the responsibility of the other; the spouse who owns an asset can leave their property to whoever they want in the case of their death.

In a common law property state, an asset or debt belongs to both partners if it was acquired in both names or from a jointly held account. However, the type of title an asset has impacts whether it automatically becomes the property of the surviving spouse or can be left to someone else if one spouse passes away.

In a community property state, by contrast, both assets and debts acquired during a marriage belong equally to both spouses. However, assets and debts acquired by one spouse before the marriage belong only to that spouse. Gifts or inheritance that only one spouse receives during the marriage also belong solely to that spouse.

To ensure that your property is allocated the way you and your spouse wish, set aside time to take care of financial tasks like:

• Establishing any joint banking or savings accounts that you plan to use
• Adding the other spouse’s name to assets that you plan to share, such as a property deed or car title
• Updating (or making) your wills
• Updating the beneficiary on your insurance policies
• Adding payable-on-death designations to your banking and investment accounts

Tax Implications

Once you’re married, you can choose to file separate or joint tax returns. Many couples file joint returns, which allows you to take advantage of deductions and exemptions that are only available, or available at a higher amount, to married couples filing jointly. These include the:

However, there are reasons that a married couple might choose to file separate returns. Filing a joint return means you are jointly liable; if one spouse doesn’t want to be responsible for the other’s tax liability, or if one spouse has not filed past tax returns, filing separate returns can create a protective distance. Other reasons to file separate returns include maintaining separation from a spouse’s business or allowing a lower-earning spouse to claim significant medical deductions.

It may also make more sense to file your taxes separately if one spouse has significant student loans. This can allow the spouse with the loans to report a lower annual income, which could let them qualify for a lower monthly payment on an income-driven repayment (IDR) plan.

If you are unsure which tax filing status is best for you and your spouse, talk to a tax professional. You do not have to use the same filing status from year to year; you can file jointly one year and separately the next.

The Bottom Line

Whether you and your spouse keep your finances completely separate, completely combined, or somewhere in the middle, your financial decisions will have significant consequences for both of you.

Start discussing your finances, money attitudes, and goals before you get married. Continue working together as you plan your wedding, manage a household budget, and decide how you will handle savings and taxes. Take time to understand property laws in the state where you live so that you know who is responsible for assets and debts acquired during the marriage.

If any of these conversations or decisions are difficult, you don’t have to tackle them alone. A financial advisor can help you and your spouse create a healthy financial life in your marriage.