Unfortunately, in all the planning and romance of a wedding, one aspect of marriage is often forgotten—and that is a true understanding of personal finances. It begins with the high cost of the special day. The average cost of a wedding today is more than $26,000 (less if you don’t drink or dance). Joshua and MaryEllen are certainly not the first couple to discover that a wedding is both a financial commitment and an emotional milestone. To pay for their special day, 40 percent of brides and grooms lean on plastic, or their parents raid their retirement accounts or take out home equity lines of credit. (FYI: The same $26,000 invested at 6% would grow to over $150,000 in 30 years.)1
However, even more important than the wedding expenses are understanding and putting into practice good money management principles. Here are some simple rules that can get you started to help couples who are planning to be married, and those who are already married.
Before You Say “I DO”
• Come Clean on Your Finances. – Share everything—tax returns, TSA portfolios, bank statements, and other relevant financial information.
• Discuss Your Financial Future. – Do you and the love of your life share mutual money management goals? Have you worked out a household budget together? Which of you will be best able (has the time and the know-how) to handle the day-to-day finances and pay the regularly occurring bills? What plans do you have for consistent savings for daily maintenance needs and future education, family, or retirement?
• Swap Credit Reports. – Opening the mail after you have been married a few weeks and finding that your beloved is over their head in school loans and charges and credit cards can quickly change the happiness thermometer. Remember, once two people are married, it is no longer their debt; it is “our” debt. Before you get married, think seriously whether your fiancé’s debt is, or should be, a deal breaker.
• Reveal Your Assets and Your Liabilities. – Do either of you come to this marriage with appreciating assets, such as apartments, condos, or houses? What will you do with inheritances, investments, and retirement accounts? Be straightforward in asking questions about how much your fiancé owes on furniture, appliances, automobile, and technical equipment.
• Get Those Documents Together. – It’s never too early to prepare a simple will or a trust, or have health care directives and power of attorney forms. Make the arrangements to have both you and your future spouse on all previous and new bank accounts, investment funds and insurance policies. A number of these forms are available free at www.alllaw.com/forms.2
After You Say “I DO”
• Make God Your Partner. – Since our Heavenly Father is the creator and sustainer of all things in our world, it would make perfect sense to include Him in your money management. Returning a faithful tithe and giving generously to your church budget and other offerings indicate your understanding that He is the owner and that you as a couple are His managers. Determine from your first day of marriage to be wise stewards of your money.
• Set Up An Emergency Account. – Before you do any other thing with your money, set aside a “rainy day” account of $1,000. This will save you from having to rely on credit cards for financial crises. This $1,000 will cover three major items: vehicle and household maintenance and medical emergencies.
• Develop a Financial Plan. – Together, decide what is important to your financial future. Develop short-term goals (next 12 months), mid-term goals (next five years), and long-term goals (next 20 years).
• Have a Spending Plan. – This you cannot ignore. Having a budget will be your lifeline and liberator and will help you make financial ends meet. Remember to include a personal allowance for each of you, and always have a catch-up line in your budget for miscellaneous items.
• Save, Save, Save! – Your first goal (after setting up your emergency account) should be to save enough to live on for three months, just in case one of you should get sick or lose your job. Another good savings idea: always match your employer’s 401k or 403b contribution.
1 Money, May 2005, page 126.
2 Concepts from Cheapskate Monthly, June 1999.
The High Price of Saying “I Do”
1. What percentage of the average wedding cost goes to the reception?
a. 56% b. 42% c. 25% d. 20%
2. What percentage of brides and grooms are going to pick up the tab for the wedding?
a. 27% b. 24% 3. 15% d. 7%
3. What percentage of women think it is a mistake to marry someone who will be a “financial burden?”
a. 33% b. 26% c. 19% d. 13%
4. What percentage of men believe it will be a problem if the wife out-earns them?
a. 53% b. 46% c. 37% d. 34%
1. b. 42% (25% goes to flowers, apparel, and photography)
2. a. 27% (same percentage for bride’s parents only)
3. a. 33% (26% of men think it would be a mistake)
4. d. 34% (53% of women think it would cause problems)
If you liked this, you might also like Drowning In Debt | Money and Marriage: 7 Tips for a Healthy Relationship
Gordon Botting wrote from Northern California.
Money, May 2005, pg. 126.
Family Money, March/April 2000, pg. 12