Money and Marriage: How to Prevent Financial Issues From Destroying Your Relationship

Being proactive and open about finances can help manage and prevent money troubles in your marriage. This article shares tips and legal tools to help you and your spouse build and maintain a stable financial foundation.

1. Set Expectations For Money Management and Finances

Money matters are a common cause of divorce because couples can have very different expectations on spending and saving money. To avoid marriage financial problems, consider the following questions when setting long-term goals for your financial future:

• What are essential expenses, and what are discretionary?
• What are shared expenses and what are individual expenses? What is your money, their money, and “our money”?
• Should we have separate accounts or a joint checking account for marital expenses?
• Should we have separate savings accounts?
• Which accounts should be joint accounts, and which accounts should be separate?
• If there's an income disparity, who should contribute to what and how much?
• How will we handle debts that came into the marriage?
• Who will be responsible for managing and making the payments for household bills?

Newlywed couples might prefer discussing financial goals with a financial advisor. For instance, all assets and debts brought into the marriage remain the separate property of the person who acquired them. Assets and debts acquired during the marriage become community property. This can include credit cards and student loans unless couples plan ahead.

2. Plan for Your Financial Future Together

No one can predict the future. That should not stop you from making sound financial decisions now. Set financial goals early on so you can save for major expenses later. Planning your spending habits now can help you both manage your expectations and make financial decisions you agree on.

For example, one of your first goals as a couple should be to build an emergency fund for unexpected disasters. It also takes time to develop the credit score that will net you the home you want for your family.

Revisit your financial plans as your expectations and circumstances change. Some topics to consider include:

• Will you be buying a house? Houses and real estate become marital property when purchased during the marriage.
• Will you have children? How many?
• Will you need a college fund for your children?
• When do you expect to retire? Do you have a retirement plan or life insurance through employment?
• How often would you like to travel and go out for date nights?
• Will you remodel your home or invest in structural changes?
• Will you buy vehicles? If so, new cars or used cars?

3. Make a Household Budget

Start by listing your current income. Then, discuss your expectations for saving and spending. Now you’re ready to create your household budget.

You can create a financial planner with the help of an accountant or do it yourself with a spreadsheet like Excel. There are also several apps that can help you budget, track expenses and spending, and store receipts. Some apps even allow you to sync your bank accounts and set goals.

You must account for basic costs. Items to include in your budget are:

• Income: This includes salaries and other income sources (like rental property, stock dividends, and business draws). Income is regular payments to your bank account.

• Assets: Assets are all items of value, whether or not they are “liquid." Assets are your total worth if you sell everything. These include real property, valuable personal property (artwork, jewelry), checking and savings accounts, pension plans, and retirement plans.

• Debts: These are all outstanding sums that you owe to creditors in total. That is the total of all loans, mortgages, credit card debt, auto debts, and so on.

• Expenses: Expenses are your regular weekly or monthly payments to meet your basic needs. Necessities include rent or mortgage payments, groceries, and utility bills. Non-essential expenses include travel, entertainment, and eating out.

You should review your household budget every few months. You need your joint bank account and separate account statements to see where the money goes. You should also have your credit report and credit card statements. Budgeting lets you see where you can cut back and where you are spending too much on nonessentials.

4. Review Your Financial Plan as Circumstances Change

Learning to handle money takes time. Just as newlyweds figure out a solid budget, a baby or a new job may come along to add a new cause of financial stress. Regular review of your financial plan can help avoid financial disagreements. Equitable division of the spender and saver roles keeps married couples from blaming one another for shortfalls.

Check in frequently. Discuss minor concerns before they become major concerns.

Realistic financial goals should be a priority from the beginning. Many couples today use prenuptial agreements to divide personal finances and marital finances before marriage. If you did not do this, there is a “postnuptial agreement" that your attorney can draft. It is a prenup, written after marriage.

Your financial situation will continue to change throughout your marriage. You and your spouse should be comfortable discussing, revisiting, and modifying your financial goals.

5. Watch For Warning Signs of Financial Irresponsibility

One of the best ways to ensure a healthy financial future for your relationship is to identify potential issues early on—ideally, before you marry. It is common for couples have discrepancies in their earning potential or debt. But, some financial “red flags” may indicate deeper, lasting issues.

Some warning signs of financial instability to watch out for in your partner include:

• Dishonesty or lack of transparency about their financial stability
• Hidden debts
• Impulsive spending habits
• Core differences in money management
• Frequent job changes or periods of unemployment
• Lack of savings, emergency fund, or retirement accounts, despite the means to contribute
• Poor credit history or a record of late payments, defaults, or bankruptcies

Keep in mind the situations above can be nuanced. For example, viewing money through a different lens than your partner doesn’t necessarily mean they’re financially irresponsible. Or, having perfect credit doesn’t always indicate poor money management—it might be due to past circumstances that have since improved.

Identifying any potential financial red flags should at least prompt serious conversations with your partner regarding money habits. If you decide to get married, it is even more critical that you draft a prenup to protect your assets and prevent taking on their debt.

If you’re already married and spot warning signs, it’s not too late. You can still protect yourself with a postnuptial agreement.

Getting Out of a Bad Marriage With No Money

Leaving a marriage—especially with limited financial resources—can feel overwhelming and impossible. But, there are ways to navigate this difficult situation and establish a new beginning.

Legal aid organizations may be able to help you. They can explain your rights and the steps to take to leave your marriage. Pro bono programs and legal clinics provide legal help to qualifying individuals. Every state has legal aid resources that offer free to low-cost legal help depending on income, location, or other criteria.

A divorce attorney can help you regain financial stability. An experienced attorney can advocate for your best interests regarding property, alimony, and child support. They can help ensure a positive financial outcome in your divorce settlement.

You can also consider a collaborative divorce or divorce meditation. Marriage dissolution via these methods is typically less expensive than a traditional divorce. This is because they do not require as much, if any, litigation.

There is also help available if you are experiencing domestic violence.

Marriage and Money: Getting Legal Help

Despite your best efforts and planning, you may need professional legal help navigating the financial aspects of your marriage. A family law attorney can provide expert legal advice on how to protect your financial interests and assets. An experienced attorney can also advise on:

• Prenuptial agreements
• Protecting family money or an inheritance
• Managing joint assets
• Determining tax liabilities and advantages
• Options for divorce or legal separation

Contact a local family law attorney today for help strategizing your family’s financial future.