Financial Playbook for Married Couples

Many people promise their partners to love and to cherish one another for richer or for poorer. Yet many skip the financial part of the vows and avoid talking about money, leading to trouble in the relationship. A CNBC survey found 56% of divorced Americans said they never talked about their finances with family members.

Not talking about finances eventually leads to arguing about it. Multiple studies and surveys show arguing about money is strongly correlated to divorce. While the topic can feel taboo, discussing money can lead to a better marriage.

Because finances in marriage can make or break a relationship, MoneyGeek created a playbook for couples to take control of their shared finances and build a strong partnership for the future.

When you begin to discuss your finances with your partner, it’s essential to be honest. Several studies link financial differences with divorce, but clear communication can overcome those challenges. It’s important to know that many successful marriages started deep in debt before the couple built a savings and retirement plan together.

Talking about your finances can be difficult, especially for those with debt. This guide will help you break down your current financial situation, your goals and how to create a budget that works to reach those goals.

To start, you and your partner should discuss your views on money — they are likely different based on your respective childhoods. Knowing how you both approach money management will help you determine how to manage finances in your marriage.

Like your life, career and family goals, financial goals can change with time and circumstances. It’s best to discuss these topics with your partner early and often.

“Overwhelmingly, happy couples reported they agree on how to spend money as compared to unhappy couples,” according to the University of Arkansas Cooperative Extension Service. It suggests you set up goals and a spending plan to ensure you are on the same page. When you are both working toward the same priorities, it is easier to set and follow a monthly budget. Here are some common financial goals to consider:

The first step to building a strong financial future is to start with your current financial situation. It’s critical to be open and honest with your partner. These discussions build trust, and lying or withholding information can lead to bigger problems later. For each of these categories, list all of your financial resources and obligations.

Once you have a clear understanding of your financial picture, it’s time to start a budget. For many, budgeting can feel overwhelming. It doesn’t have to be. It is as simple as comparing your spending with your goals. With a partner, you can keep each other in check and provide support as you go through this process together. A budget can help improve your spending habits, pinpoint areas where you can lower your overall expenses and build a savings fund.

You can try creating a budget worksheet in Excel or Google Sheets. You can also use envelopes to label each spending category and allot yourself an amount of money each week or month. For example, you label an envelope, "Gas," and set aside $120 to spend for the month.

If you're still unsure how to start, take a look at this guide to create a budget plan.

It’s a difficult question, but one every couple must face: should you combine finances after marriage or keep them separate? For many, this decision relies heavily on your financial history. If your parents combined accounts, then you will likely want to as well. If your family has experienced financial betrayal, you’ll lean towards keeping them separate. Only you can decide this, but there are some crucial points to consider when making your decision.

How couples combine finances is very personal. For some couples, they combine everything while others take a hybrid approach.

If you combine everything, there is no ‘mine’ or ‘yours,’ only ‘ours.’ It can be easier to share finances in marriage this way, when everything is shared and in the open for both partners to view. Many couples may choose to combine everything but divide responsibilities: one managing day-to-day bills while the other plans long-term expenses.

For simplicity, it’s a good idea to have at least one joint checking account when paying joint monthly expenses. You can use this account to set up automatic payments for rent, utilities and other monthly bills.

There are a few things to ask as you combine finances:

1. "Whose bank should we use for a joint checking account, or should we start fresh with a new bank?"
2. "Should we keep a personal checking account for hobby spending?"
3. "Is there a benefit to primarily using one credit card? Which credit card is right for us?"
4. "Will we file our taxes separately or jointly?"
5. "How will we combine physical assets? If there are duplicates, can we sell them to pay down debt?"

A note on closing accounts: closing a checking account does not affect your credit score but closing a credit card may. If you have a credit card in good standing over a long period of time, it may be beneficial to keep it open and use it periodically. Having good credit provides advantages, so it's best to keep that in mind when combining accounts.

While much of the traditional financial advice will push you toward combining finances, there are many circumstances when legally separating finances is a good idea. Here are a few things to consider before combining your accounts.

Keeping finances separate might be right for you if:

• One person holds a significant amount of debt
• One person owns a business
• You have significantly different financial habits
• You psychologically need independence to feel safe and secure
• There is any history of mental illness, substance abuse or a spending addiction

Whether you decide to keep finances separate or combine them, there are actionable steps you should take to set yourselves up for success. As a legally married couple, there are ways to invest in your future, save money and protect yourselves.

When you’re single, you likely have no option but to join your employer’s health insurance plan. As a legally married couple, you have the opportunity to pick the best health insurance plan of the two. It may be cheaper to be on one person’s plan, but there are a few questions worth answering before making the switch.

1. Are there additional fees if you join a family plan and decline your employer’s health insurance?
2. While one plan may have a lower monthly cost, will you have to pay more for medical expenses? How will you pay for those expenses?
3. If your preferred plan includes a Health Savings Account (HSA), will that account be shared?
4. How will you split monthly costs if you decide to go on a family plan?

It’s not a topic many like to discuss, but it’s essential to know how your spouse would manage financially without you. Life insurance will protect them with a financial payout upon your death. Rates depend on your age, health history and occupation.

There are two major types of plans: term life and permanent life. While it can be confusing to understand what you need and how much money you should spend, learning how life insurance works and comparing plans can help you find the best policy for your needs and budget.

Another benefit to marriage and finances: most of the time, getting married will lower your auto insurance premiums. The discount usually requires using the same provider and combining plans.

While it may be simple to pick your current insurance provider, changing your insurer can significantly adjust your rates. It's a good idea to take the opportunity to compare car insurance quotes and find the best deal for you.

The cost of raising a child may give you a bit of sticker shock. According to the U.S. Department of Agriculture, the average cost of raising a child is now $233,610. Having a child is worth the money for many couples, but it’s good to know what to expect and begin planning early.

Expenses increase as your child ages, with college being the highest cost. The first-year expenses can also add up quickly with medical bills from childbirth and child care. It’s important to decide how you will cover and share these responsibilities equitably. There are resources to financially prepare for a baby to learn what expenses you may have and how to budget for them.

As you begin your life together, there are resources available to guide you through your financial journey. While every situation is unique, research and training courses from the government, universities and nonprofit organizations will help you find the right money management plan for your relationship.

• National Resource Center for Healthy Marriage and Families: This government-managed site includes a complete section on financial management with a library of tips and strategies, as well as a free virtual training course.
• Mymoney.gov: The U.S. government promotes its financial education initiative with downloadable templates and tools to teach Americans to spend, earn, protect, borrow and save responsibly.
• Powercat Financial Counseling: Kansas State University created this marriage and money guide to help couples walk through the process of combining finances and building a strong financial foundation.
• National Foundation for Credit Counseling: If you have significant debt and are looking for a plan to pay it off, this nonprofit provides much-needed counseling. It also offers financial planning tools and calculators to help you start building a budget.
• University of Arkansas Research and Extension: The University of Arkansas Department of Agriculture offers a full set of personal finance management resources, including a “Financial Smart Start” series for new couples.