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Work, life and the pursuit of happiness for the young professional.

Pre-Marital Finance 101: 5 Steps to Pre-Wedding Financial Planning

The excitement of the engagement ring and proposal are just the beginning of two lives becoming one in marriage. A big piece of marital fusion is two totally separate financial setups becoming one. Not an easy task. As I am going through the process right now, I thought I would share my experiences thus far with fellow pre-marital young professionals.

With the whirlwind of planning that occurs for the big wedding event, it can sometimes become the only focal point for a couple, with the exception of maybe trying to plan a tropical honeymoon. This tendency is natural, we all want to focus on the exciting, immediate event but, marriage goes on forever after the wedding.  Failing to plan for the time after the big event could make it tougher on you then it should be. Here are a few ways to help build towards pre and post marital financial bliss:

1. Know your financial strengths and weaknesses, and those of your significant other. Are you a spender or saver? What is your approach to money? Could your partner’s strengths help counteract your weaknesses?  Even just knowing both of your approaches to money can significantly smooth financial discussions and planning because you know your unique approaches to money and how to approach the differences.

2. Learn from others.  Watch how your parents or others approach their finances, ask them for advice (if they are a good example).  Beyond personal examples, there are tons of great reasources out there on personal finance.  Here are the top 18 blogs on money and finance I read via Google Reader to stay in touch with the latest personal finance strategies and ideas.  Even if I know some of it already, it always gets me thinking and keeps me focused on solid financial goals.  If you use Google Reader, here is the bundle of blogs (thanks to Mark Roberts for many of the suggestions) so you can see some sample posts and subscribe to all of them if you want.
Blogging Away Debt
Budgets are Sexy
Dual Income No Kids
Enemy of Debt
Free From Broke
Gather Little by Little – Personal Finance with a Christian Perspective
Get Rich Slowly
Good Financial Cents
I’ve Paid For This Twice Already…
Man Vs. Debt
Money Under 30
My Money Blog
No Debt Plan
Single Guy Money
The Simple Dollar

3. Measure your finances and get everything in one place.  You can’t management what you don’t measure!  Check out 3 Fast and Easy Budgeting Methods to get started if you don’t already track your finances but, whatever you use you need to know what you are spending and what your budget is before you can merge your budget with someone else’s.   Yodlee is great and I know many who use Mint, pick something that works for you and stick with it.

4. Have a sit down discussion 6 months, 4 months and 2 months before your wedding.  This can be tough, especially if you are busy or not focused on financial planning but, it’s crucial.  Get all of both of your budget, spending and asset information together (I printed mine off Yodlee), take an hour on a Saturday or Sunday afternoon with no distractions (TV off) and walk through what you each spend now and what your budget will look like together.  It’s not just adding things together, you can save on insurance, cell phone bills etc but, there are other things you can’t save on.  Should you increase the amount in your emergency savings fund? What do your retirement savings look like? Get it all on paper.  I know the tendency is there to use excel or a computerized method but, that can distract you from the focus. Don’t forget to file all your papers and review them at the next meeting!

5. Set goals and check up on them.  Set savings, tracking and other goals at your meetings and check up on them at the next meeting.  Are your spending and budget projections on?  Do you need to adjust savings or spending to hits your goals? These check ups and goals will only serve to help you communicate and prepare for a married future.

I am still learning the ins and outs as I go but, this is what has worked for me so far.  Please share your experience, tips, personal finance blogs or other information as well in the comments!

Image Credit: sunshinecity

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  1. Great article. People need to realize that weddings are not all rainbows and butterflies. About 50% of marriages end in divorce and I bet a lot of that has to do with money. New couple need to discuss their finances and goals even before they get married! If you don’t you could be in for a big shock if you find out you and your spouse have different ideas regarding saving vs spending!

  2. Absolutely, few people seem to think about it but the main difference between marriage and simply-living-together is a legal and financial agreement. Definitely do not enter into a marriage without a respect and understanding that at it’s core, marriage is a legal contract. Yes, love, butterflies, and bliss… but serious, it’s a legal contract.

    If one of you has more debt than the other (like student loans) or one wants to spend on things like clothes or travel but the other thinks those things are frivolous… it can lead to serious martial cracks. It is not always the one thing that will lead to divorce, but if there is a misalignment in the financial sector, any other misalignment in other aspects of the marriage will seem more pronounced.