You and your partner probably talked a lot about money while planning your wedding day -- from how much to spend on your reception to whether to splurge on an expensive honeymoon or keep it simple.
But have you talked about how you're going to handle financial decisions together after you walk down the aisle?
"Some people just don't put much thought into that financial merger," says J.J. Montanaro, a CERTIFIED FINANCIAL PLANNER™ practitioner with USAA, "and they put no effort or communication into it. This is a big mistake."
And a common mistake. According to a survey by the American Institute of Certified Public Accountants, the average couple argues about money three times a month -- making finances the hot-button issue, ahead of disagreements over kids, chores, work and friends. In addition, more than a quarter of all couples surveyed say that money is the most common reason they fight.
The good news: You can beat those stats and help protect your marriage from money battles before they start. Here's how:
1. Communicate. That's the key to handling money -- and all other important issues -- both before and after your wedding day. Each partner may come into a marriage with different money-management styles. For instance, one might be a saver while the other is a spender. "So much of any marital success is based on compromise and meeting in the middle," says Montanaro. "The same goes for managing money as a couple."
Once you're married, financial "date nights" are essential. Use this time to talk about your progress toward financial goals, such as saving for a house or investing for retirement, and make sure you're on the same page about ongoing money decisions. You may find that you enjoy the process and have more financial power together than on your own.
2. Share your goals. Before you met each other, you probably had financial goals, whether vague, such as retiring to the mountains someday, or specific, such as starting a business within three years. Write down those ideas again and compare lists. Talk about how the items on your lists can translate into joint financial priorities for your future.
"Your discussion should cover day-to-day budgeting, savings, retirement planning, debt management and an agreement about which money decisions will be made as a team and which will be made individually," suggests Karen Goodfriend, a CERTIFIED FINANCIAL PLANNER™ and a CPA personal financial specialist. Be sure to include short-term goals, such as buying a house or new car, or taking a vacation, and long-term goals, including college planning for your kids and saving for retirement. "Recognize you may have different perspectives, which is normal, and there isn't a right and wrong," says Goodfriend.
Next, take your separate lists and create a shared family wish list. This will allow you to create a financial road map to each goal. If you disagree about the priority of the items on your list -- for instance, which are "financial needs" and which are "wants" that could be delayed -- enlist the help of an objective financial planner. He or she can provide insights to help you and your spouse make a solid decision as a couple.
3. Create a spending plan. This concrete plan -- also known as a budget -- will help you and your spouse follow the financial road map. "Putting your goals in writing makes it easier to see where your money is going and to stick to your financial agreements," says Goodfriend. With it, the two of you can plan for priority spending, adjust the plan as expenses change over time, eliminate waste and see if you're on target to reach your goals.
Some married couples use joint accounts to pay the bills in their spending plan, while others maintain separate accounts but chip in equally toward major household expenses. There's no single "right way" to manage your married money, as long as you both agree on the strategy.
If one of you takes on the day-to-day responsibility for paying household bills, the other should still stay involved. "It's not a good idea to have just one person running the show," says Goodfriend. "The ‘bookkeeping spouse' may need some feedback or feel overburdened with the financial decisions." This is another good reason to have regular "financial dates."
4. Keep some personal money. It can be tough to go from being single with complete control over your finances to sharing every money decision with your spouse. If you decide to merge your finances completely, consider allowing each other a little separate personal money every month. "It can take off some financial pressure and reduce your chance of arguing if you each have some money to use as you like, without having to account to each other," says Goodfriend.
5. Consider your credit scores. Ask about your partner's credit history and divulge your own before you walk down the aisle. "If one person has credit issues, the sooner the issues get addressed, the better chance you'll have to resolve them," says Goodfriend. "Once married, you'll likely take on joint obligations, and if one of you has a poor credit history, it could negatively affect your ability as a couple to get credit on favorable terms."
The spouse with the poorer credit history might even benefit. "If the spouse with solid credit adds the spouse with poor credit onto his or her credit accounts, the poor-credit spouse's credit score may improve," says Montanaro.
6. Plan for the long term. Now that you're working toward the same goals, see if your existing investments complement each other. "Look at all the different pieces of your retirement plans and how they're invested," says Montanaro. "Next, examine how those plans are going to look together because you're going to retire together." If you need guidance when coordinating your plans, a financial planner can help lead the way.