Marriage & money: 5 financial mistakes couples make the first 5 years
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You’ve probably heard this your whole life: Money isn’t everything. Although this is true, money does matter - especially in marriage.Indeed, during the first five years of marriage, many couples make money mistakes or fight over finances. According to a 2015 SunTrust Bank study, almost half of those surveyed said they had different spending habits than their spouse.Even more telling: Finances are the number one cause of stress in a marriage, with 35% percent listing money as the top stressor, outranking "annoying habits," which came in at number two with 25%.
So, how can you ensure that money doesn’t lead you and your spouse down the rabbit hole toward divorce? While there are no guarantees when it comes to marriage, we’ve compiled a list of five money mistakes most married couples make in the first five years. By learning from these common money mishaps, perhaps you will stay blissfully wed. Take a look:
We get it: It’s not easy or comfortable to talk about money. Yet, being open and honest about your debts, income, assets and other finances is essential right from the get-go. Many newlyweds make the mistake of not discussing their finances until some major decision forces a conversation. Instead, financial experts suggest getting into a rhythm of sitting down for monthly money meetings with your spouse. Experts suggest money dates where you can talk about your bills, purchases, and debts in a relaxed way. By getting everything out in the open, this helps promote compromise.
Even if spouses discuss money and spending habits with their partners (see #1 above), some still spend several years married without telling their husbands or wives about a money secret. For example, perhaps a spouse inherited money and stashed it away somewhere, or worse yet, one half of the married couple puts aside money to gamble every month. If your spouse has debt that you don’t know anything about, this too will come back to haunt you both, as that debt becomes both of yours once you get married. If you don’t jointly work toward paying this debt down, it can affect your ability to get a car loan or mortgage down the line. Think about it this way: Although you may get away with not telling your spouse about your money habits or secrets for a while, eventually they’ll find out and this can lead to a money meltdown in your marriage. Instead, be transparent and avoid secrets.
You know you should have a budget with your new spouse, but it seems like a hassle and somehow your bills get paid anyway, so why bother? If you think this way, you’re not alone. Many couples run their financial households by the seat of their pants - especially in the early years of their marriage. Yet, ultimately, you will avoid more debt and stop spending beyond your means if you and your spouse create a budget and stick to it. You can start by using a spreadsheet to track your income and expenses. You can also use budgeting apps and programs like You Need a Budget to help you and your partner stay on top of your spending.
While you and your partner are equals in your marriage, regardless of which spouse earns more money, many couples make the mistake of trying to handle all money matters together. In a perfect world, this would be nice. However, most successful partnerships have defined roles depending on the skills and interests of each spouse. One partner, for example, may do a better job of paying bills on time, whereas the other handles their investment portfolio. Think back to our first tip, though: Even if you’re separating roles and responsibilities, you still need to have regular, transparent discussions around your money.
When you first get married, your goals as a couple may include paying off student loans, starting an emergency fund or even saving up to buy a house. Yet, it’s equally important to create a long-term plan that will carry you both through to your retirement years. This means that you and your spouse should start contributing to a retirement plan as early as possible. Because your financial needs will change as the years go by, creating a viable financial plan to reach key benchmarks for different life stages will help keep you directed and on track. This may seem challenging, especially in the early years of your marriage, yet when you’re older, you will appreciate all the conscientious planning you did for your future. Plus, you won’t have to eat noodles or rely on your kids to support you. Double bonus.
Image: Jenifer Corrêa
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