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The Newlywed's Ultimate Guide To Pain-Free Personal Finance

You just got engaged or married — congratulations!

While it's easy to get caught up in the excitement and bliss of it all, at some point in the near future you're going to find yourself back in the mundane world of savings accounts, credit cards, life insurance, and financial planning.

And like it or not, successful, happy marriages come down to financial matters more than any other factor.

The Newlywed's Ultimate Guide to Pain-Free Personal Finance explores the best ways for newlyweds to plan finances—and keep the peace.

It will help you make important decisions that can affect the rest of your life—and the success of your marriage—all while keeping your honeymoon phase alive and well for years to come.

Coming to Terms with Money... Together

Bonnie Eaker Weil, Ph.D., a New York-based relationship therapist and author of the bestselling books, “Make Up, Don't Break Up: Finding and Keeping Love for Singles and Couples" and “Financial Infidelity: Seven Steps to Conquering the #1 Relationship Wrecker," agrees that money is a “charged" topic and most people don't feel safe discussing it.

Our brains get excited about money, which can lead to painful arguments, extreme stress—and, in many cases, breakups and divorce.

“Nobody wants to talk about money because they don't know how," says Dr. Eaker Weil. Knowing how to have an open dialogue about finances with your spouse in a safe way is vital.

According to research from the National Foundation for Credit Counseling, just 32 percent of engaged couples thought that talking about newlywed finance planning would be an easy, productive discussion. Nearly half of them said that talking about money would be a necessary but awkward conversation. And about a quarter of the couples thought the discussion would cause fights, reveal one partner's hidden financial issues, or cause the couple to call off the wedding.

Change for the Better

As someone who is soon-to-be married or newly married, you are probably aware that your financial landscape will change upon saying “I do." Making this change as positive as possible—and one that might draw you even closer together—involves open, honest communication. For some couples, this topic may expose flaws in the relationship that may seem too overwhelming to overcome.

The smoother these decisions and actions go, the easier it can be on a new relationship to cultivate sound financial practices and happiness. Merging finances can be less painful when you know what to discuss, keep sound communication strategies in mind, and are aware of your financial options.

Simply put: You want your relationship to be successful. That success hinges on knowing all of your options and being prepared to handle these decisions together. Reading this guide can help make the entire process easier—and perhaps bring your relationship to a new level.

This guide will help explain some of the most popular concerns that couples have and offers valuable solutions that will improve your relationship and your financial future. Dig in, then go ahead and share this guide with your partner. After all, sharing is caring!

Table of Contents:

  1. Start a conversation that could earn — or cost — you money

  2. Know what debt you're working with

  3. Joint… Everything? How to manage your accounts

  4. Work with a budget and thrive

  5. Plan for and flourish in the future

  6. Get a handle on taxes

  7. Protect your (best) assets

Chapter 1: Start a conversation that could earn—or cost—you money

While it may seem that managing finances is purely about crunching numbers, it's also about communication. Some married pairs have probably discussed finances and financial goals long before they exchanged vows. Others may not consider the financial implications until after they get married. Make the conversation about finances smoother, and your marriage will be off to a strong start.

Financial freedom starts with having a conversation or series of discussions, which can be difficult for some couples to do. Study after study shows that couples that do not openly discuss their money-related desires and goals could face financial demise—and subsequently lead their marriage down a path to failure.

A 2013 study of more than 4,500 couples surveyed by the journal, Family Relations, revealed that arguments about money are the top predictor for divorce. This is true regardless of how much or how little couples make. "It's not children, sex, in-laws or anything else. It's money—for both men and women," said Sonya Britt, assistant professor of family studies at Kansas State University.

Try this conversation game plan:

  • Set an agenda: Think about what you'd like to discuss
  • Set the place: Choose somewhere you are both comfortable and uninterrupted
  • Set the tone: Promise to keep an open mind and practice sound communication strategies like listening and being patient with one another.

How to discuss finances with your partner without getting into a major spat

If there's one thing you need to know it's that you haven't really had "feelings" for the other person until you discover that they've been getting hit by overdraft fees and late payment dings on a monthly basis. Strong emotions will surface when you talk about finances, which is why it's important to know how to approach the topic with as much TLC as you can possibly muster.

Acknowledge your differences

We all know and agree to the saying “opposites attract," so it's no wonder most relationships likely feature pairs with very different perceptions of and practice with money. In most cases, you have a saver and spender, but it can even go beyond that, says Dr. Eaker Weil. People have different financial pasts, and marriage means accepting and working to help a partner with their financial struggles. Essentially, it's a power struggle, which makes discussing and merging finances all the more complex.

“Engaged couples need to know that they must deal with this before they get married, or they're going to have the problem no matter what," Dr. Eaker Weil says. Financial problems can be fixed—couples just need to be honest about them and devise solutions to overcome challenges.

That means you have to talk to each other about money.

Get "smart-hearted"

Dr. Eaker Weil created the “smart heart dialog," a framework of communication tools to use when broaching the touchy topic of money with each other:

  • Set ground rules, such as taking turns putting on an “emotional bulletproof vest" that makes discussing money safe and objective
  • Validate how your partner feels (say things like “I hear you saying this…" or “so are you saying this?"
  • View financial habits from their perspective
  • Devise customized goals and solutions based on your ultimate needs, such as saving to buy a home in the next two years and pay off all debt.

Look back to look ahead

Dr. Eaker Weil recommends looking into each other's financial legacy. Talk about how your families viewed and handled money and their general financial standing. It can help your spouse better understand your views on managing finances and give you insight into how your partner developed his/her attitudes on money. Better yet, you may not be so agitated with each other when you realize how different you perceive and manage financial issues.

Prepare for the “big talk" for a fresh money management start

Here are a 4 things to do to get ready to discuss your finances:

1. Organize your files

For an accurate and effective money discussion, gather all those important financial documents:

  • Bank statements
  • Retirement account paperwork
  • Credit reports
  • Credit card statements
  • Loan information (if applicable)

2. Ask the right questions

When you refer to money as a married couple, the pronoun “ours" is priceless. (Get used to it!) If not, then it's human nature to become territorial over what's “yours" and what's “his/hers." This is especially true in cases of differing salaries.

That said, couples should phrase questions in a very considerate matter, suggests Edward R. Collins, a founding partner and wealth advisor with Artisan Wealth Management in Lebanon, NJ. Instead of asking “How are you going to cut down your excessive spending that got you into all that debt?" say “How can we reduce our spending and pay off our debts?"

Use this list to get your started, says Collins:

  • What is your first memory about money?
  • What financial lessons did your parents teach you about that have really stuck with you?
  • If you were to win a scratch-off lottery ticket that provided an extra $100 per week, what would you do with the money?

3. Be open and honest

According to financial expert Dave Ramsey, newlyweds need to embrace transparency. That means being open about personal debts and spending habits. He recommends each spouse talk about how their parents taught them about money, and bring up any areas of disagreement. It's so important that Ramsey covers it in Financial Peace University (FPU), an online and in-person class ideal for newlyweds who are interested in money management and financial planning.

4. Consider your lifestyles

Paula Levy, a licensed marriage therapist in Westport, CT, told BankRate that marriage means that you need to merge finances—and lifestyles, too.

"You have to plan together," Levy said in the article. "Otherwise, you are essentially living two different lifestyles under one roof."

That's especially true for couples that find themselves in situations where one person is an overspender or a splurger, while the other is more conservative with spending.

If you recognize yourselves in that last sentence, you may need to pare down vacations—or skip them completely—at least until you get on your feet financially. It could also mean curbing spending on hobbies, or on the flip side, changing habits that involve being too stingy—and anxious—when it comes to spending. It can also mean devoting a percentage of income to bills and some to guilt-free spending—mastering the art of money management, if you will.

Chapter 2: Know what debt you're working with

Before you both met, you each had a credit standing. Perhaps one of you accrued a ton of student loan debt or—eek!—made careless purchases, while the other swore off credit cards and paid everything in cash. When you're married, though, you may take on the other person's debt. Indeed, it's a whole new financial situation.

In “community property states" like Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin, most debts incurred by either spouse during the marriage are owed by the "community." That means you could be responsible for paying it off in the event that the other person dies—just because you're married.

Your credit status and amount of debts can interfere with things such as buying a house or a car. If you have too much debt or bad credit, you're not going to be able to do these things.

During “the talk" mentioned in Chapter 1, we reiterated how important it is to be completely upfront about past, present, and future debts.

Undo your debts: Student loans, credit card debt, etc.

It's common for one spouse to come into the marriage with more debt, or to differ on how much debt is OK. Talk it out and see which debts need to be paid off first, or decide if you need credit counseling.

“Now is the time to meet in the middle," says Sweeney. “Tackle your debt decisions together and pay off what you can as soon as possible to free up more money to save for future goals."

Since most debts prevent the merger of debt (meaning, if a debt is in your name, it can't officially be transferred to your spouse's name as well), a couple would have to refinance the debt to make it a joint responsibility, Collins says. He notes that federal student loans cannot be consolidated or refinanced jointly, only individually. About the only way he counsels in favor of doing that is when one spouse has little or no credit.

“Refinancing an individual debt into a joint debt might help to establish a better credit history; however, it also saddles one party with a debt he/she is now liable for in the event of a divorce," he says.

Decide how and what you might consolidate

From credit card debts to investments, decide if it makes sense to simplify by combining some accounts. Many couples like the convenience of having their retirement savings, checking, and credit card accounts in one financial space. You may be able to merge your own student loan debts into an existing or new account, though not from separate parties.

Student loans may have a lower interest rate and be tax-deductible, therefore they are considered by many to be “good" debt. If you have an old debt with a really high interest rate, you may want to consider putting it into a new account with a lower interest rate and paying that off first.

Knowing where you stand can help couples support each other in establishing good spending and saving habits, Dr. Eaker Weil says. It can also provide the support needed for parties to pay off their debts and erase their pasts before they were married, empowering them to start fresh as a united pair, she says. In this case, ignorance is not bliss. Keeping debt (and the stress it can cause) to yourself is a money management conflict just waiting to happen.

Good debt or bad debt?

When it comes to paying down debt, Collins advises couples consider the quality of the debt and what ancillary benefits it might provide. Let's take a examine the true cost of debt...

On a $100,000, 30-year mortgage issued at 4 percent, the real cost of that debt is not 4 percent because in many circumstances the interest payment on that debt might be tax deductible. The same may be the case with debt used to finance a business, he says.

“On the contrary, traditional consumer debt receives no tax benefits, and if one carries a balance from month to month, interest expenses often mean people are paying way more in the long run," he says.

The math is pretty simple. “It is often best to pay off the highest-interest credit cards first, funneling all extra and available funds to the highest card first and paying the minimum due on the rest, and work your way down the interest cost line until they are all eventually paid off," Collins explains. “Then migrate to the other qualities of debt like automobile payments and mortgage and business loans last."

Chapter 3: Joint... Everything? How to manage your accounts

You may not know what financial changes to make upon getting married. After all, you don't have to have a joint savings or joint checking account. One partner may want everything combined, while the other wants to keep some or all things separate. One person may want to take the lead on finances, though it's best that both parties are involved. This ensures you both have a clear view of what the financial situation looks like.

With weekly or monthly financial meetings, you can adjust your strategies and goals as needed. Doing so also helps spenders get a grip on what they have and do not have to spend, and savers see when money is available for enjoyable purchases, Dr. Eaker Weil says.

Separate accounts are okay

Dr. Eaker Weil advises using a joint account—checking or savings—for bills. She also advocates each partner having their own checking or savings account for guilt-free expenses. The couple can agree how much money goes into those accounts.

The reason for a separate account is so one partner doesn't have to ask the other for permission to buy anything, Rachel Louise Ensign writes in The Wall Street Journal. So long as bills and other requirements are met, the partners can spend what they want on what they like within the parameters set. This is so both parties don't have to feel like a kid asking a parent for permission.

On the flip side, keeping up with individual expenses can be tiresome. Some couples opt for a joint savings account, but not a joint checking account for that very reason.

According to Boundless.com writer Heather Koerner, many experts, like Ramsey, feel a joint banking account is significant because it shows that the couple is united. “The money, essentially, is a symbol of the two spouse's values and priorities that need to be worked through together."

John Sweeney, executive vice president of retirement and investing strategies at Fidelity, says that some couples like a joint bank account that covers household bills, but they have separate bank accounts for personal spending.

“Some couples prefer a 'yours, mine, and ours' arrangement, with a joint account for household bills and individual accounts for personal spending," he notes. Talk about what you are comfortable with—not everything has to be joined for couples to have a secure marriage.

In addition to joint or separate banking accounts, you can also have joint or separate credit card accounts. Don't just focus on banking accounts—pay attention to credit cards, too, as they are a source of spending.

Banking options for smarter money management

Ask your bank about joint account options. You may be able to add a second person to an existing account, or add a separate account under an existing one. Many experts prefer this because it enables you to view all of your accounts in one place.

Also consider online and traditional banks and credit unions, writes Geoff Williams, a US News contributor. You may be able to get some perks depending on the type of account you open, he adds, such as no monthly maintenance fee, a $0 or low minimum balance, or free online bill payments.

Types of joint banking accounts

There are a few different types of joint banking accounts, according to Money Crashers:

  • Most are “joint tenants with rights of survivorship," which means the other partner gets everything in the event of the other's death.
  • A “Tenant in Common" account means that half of the assets go to the surviving partner while the other 50 percent goes to the deceased person's estate.
  • A “Tenancy by the Entirety" account requires both partners to sign and approve all transactions.

It might sound confusing, but your local banker can break it down for both of you. Determining the right joint account for you is integral to forming a long-lasting financial union—and avoiding financial fights.

Credit cards

As with banking accounts, some couples may have separate credit cards and/or a joint credit account. Each of you should review your credit report—together—to see the credit status of each person. Then see if it makes sense to add another user on to an existing credit account. Likewise, if one or both parties do not have a credit card, it can be a good time to open at least one account—this can help later on when you purchase things together such as cars or a house.

Types of credit cards

Whether you already have a favorite credit card account, or you're looking for a new one, consider these tips from National Debt Relief when considering your credit standing as a couple:

  • If you both have multiple credit cards and want to consolidate them into one account—and perhaps get a lower interest rate on the account—consider a balance transfer. Your existing card may offer balance transfers, or you can open a new account. Some new ones offer 0% interest during an initial time span.
  • A rewards card can give you cash back upon using it. This may be great for couples who don't have a ton of debt and want to build credit—and make money—by using a credit card for some expenses.

When you look at all of your options, you and your partner should be able to find ones that work with your lifestyle, spending habits, and future goals.

Chapter 4: Work with a budget and thrive

A budget is a simple way to track your income against expenses. It may not sound romantic, but it can help couples stay on track with their financial goals. Perhaps one partner never budgeted before, or you're unsure how to create a budget. Other couples struggle to stick to their budgets. Either way, you've got to get to it once and for all. Here are some strategies:

Spell it out. According to the pros at Fidelity, your budget should list all income sources, day-to-day expenses, and discretionary expenses. Squeeze some savings in and set aside money for your emergency fund or other savings accounts. (An emergency fund should contain three to six months' worth of living expenses.)


Categorize the important parts. You can break your budget into categories (bills, personal spending, savings, debt pay-off, etc.). You can also make the budget on paper, digitally or both. Several worksheets are available online if you're looking for a template.


Get digital. If you're an app lover, offerings like Mint and GoodBudget can help you make a digital budget. Google Keep lets you share information between mobile devices, which is sort of like a built-in “let's-do-it-together" segue into introducing the join budget concept to your better half.

With a budget in hand (or on your mobile device), you can visually see where your money comes from and where it is going. And with regular financial meetings, you and your spouse can adjust it as needed to stay on track with your financial goals.

Chapter 5: Plan for and flourish in the future

You may think that retirement planning is more for your parents than you and your partner or spouse, but including plans for the distant future is a smart part of finance planning for newlyweds.

Some couples are clueless when it comes to retirement planning because they are in the stage of life when they're just getting on their feet financially.

One partner may not have any investments or are unsure about what types of retirement options exist. Some believe they're too young to start planning, as they're overwhelmed with getting married, buying a house, or starting a family. The legalities and logistics of retirement planning can seem daunting.

Behold, there are newlywed financial planning worksheets and online investment calculators online to help you visualize your future finances—and plan accordingly. You can also talk to a financial planner about investments and retirement accounts.

This newlywed financial checklist can help you navigate retirement planning and investments so you don't have surprises or fights down the road:

Tabulate your joint net worth. At this point you have all your paperwork together, so take a close look at account balances and debt balances. Then subtract what you owe from the value of what you own.


Set and review your savings goals:

  • What are your savings goals for the next year, the next five years, or the next 50 years?
  • Do you know how much money you need to set aside monthly for a solid retirement, or are you taking the short term to focus on more pressing financial goals, such as buying a house?
  • How do you want to retire? Do you want to live more simply or have a more extravagant retirement?
  • Where do you see yourself living?
  • Are children in the picture?

Put money aside. If you are not devoting money each month to retirement from your take-home pay or other income, consider an employer-sponsored 401(k) or 403(b). You can also speak with a financial advisor about other options, such as an SEP IRA, Simple IRA, Roth IRA, or a Solo 401(k).


Tell everyone you're married. Or, as H. Jude Boudreaux, CFP and founder of Upperline Financial Planning in New Orleans, puts it: “Update your beneficiaries." If you have a trust fund or a pension, you may want to name your partner for future dependents as the beneficiary. Your life insurance policy, retirement accounts, and annuities should be updated to reflect any changes you want to implement.


Calculate risks. If you have a 401(k) or other investments, discuss the risk factor associated with some of these investments. Some couples agree on riskier options when they're younger, while others are more conservative. You want your partner to know more about retirement accounts or investments other than the simple fact that you have them. Share the numbers and options.

The next generation: Financial planning for your future

Even if you don't have children, you can still set up a Section 529 College Funding Account, Collins advises. This account, named after Section529 of the Internal Revenue Code, is an education savings plan run by states or educational institutions that helps families save money for college. You can change the beneficiary of the account to your child/children when he or she are born.

“Plan ahead so that future expenses don't derail all you have worked so hard for during your life together," Collins adds.

Chapter 6: Get a handle on your taxes

Remember checking off that single box on your tax form? Now you can switch it up—but only if you want to. There are a few things to consider when managing your taxes as a married couple. You can file married but separately, or jointly. For instance, if one partner makes more than the other, filing separately could mean you pay less tax, Collins says. Her suggestion: Do the math and consult a tax professional before you make a filing decision.

Note from the IRS: “If you are married as of Dec. 31, that's your marital status for the entire year for tax purposes. You and your spouse usually may choose to file your federal income tax return either jointly or separately in any given year."

Adjust your withholdings

Upon tying the knot, adjust the withholdings allowances that you claim on your W-4 form. These are used to help employers tabulate how much tax to withhold from your paycheck based on marital status, income, and deductions. Let's say your spouse isn't working; then you can add an allowance. Check the Internal Revenue Service website to figure out how many allowances you can claim.

A few notes on tax situations:

  • If your incomes differ widely—one person earns $90,000 a year and the other $40,000—filing jointly may put the higher earner into a lower tax bracket.
  • If incomes are about the same or both on the more robust side, filing jointly could mean you pay more in taxes.
  • There are limitations as to how you file, too. If you itemize deductions, your spouse cannot claim the standard deduction—in that case, you both have to go with the standard or itemize deductions.
  • Filing jointly makes you ineligible for many tax credits such as education tax credits—important if one spouse is still in school.

Remember tax-advantaged accounts

Things such as health savings accounts (HSAs), workplace savings plans, and IRAs can help you plan for future goals. The earnings can compound faster than those in taxable accounts, as all your potential earnings remain in the account tax deferred, which means you don't pay tax on them.

What you need to know:

  • Fidelity notes that if you have 401(k) or 403(b) plans, spouses should contribute as much as possible to earn any contributions their company will match.
  • An HSA will allow spouses to make pre-tax contributions that can be used for qualified medical expenses. These earnings and withdrawals are not taxed if you use them to pay for qualified medical expenses.
  • The HSA funds can be used to pay for both current and future qualified medical expenses.

If you don't already have a personal accountant, you may want to find one the year you are married. He or she can explain the tax rules for happily married couples like you and figure out an arrangement that's best for your new union.

Chapter 7: Protect your (best) assets

Knowing where you are financially as a couple is one thing. Planning for where you want to go is another. And protecting what you have—or what you plan to do—is another important consideration that newlyweds and engaged couples must make. You may not have much, but there are a few safeguards to think about putting into place as your begin your lives together. Doing so can prevent financial arguments that often plague many couples.

Consider life insurance

Even if you're a younger newly married couple, it's important to consider life insurance, which can provide income and eliminate debt in the event one spouse dies. The proceeds from life insurance proceeds are typically free from income taxes.

There are two options of life insurance to choose from:

  1. Term life insurance, usually the more affordable option, covers you for a specific time period
  2. Permanent life insurance, which generally costs more than term policies, is in effect as long as you live.

Couples may want to check with employers to see if they offer group life insurance, which may be built in to your employee benefit package so you don't need to purchase a separate policy.

Think about disability insurance

Another consideration related to life insurance is disability insurance. It covers part of your salary should you become disabled. An employer may provide this sort of coverage, but you may also opt to buy it on your own.

Prepare a will

You may not want to touch on such heavy topics while you're still in the honeymoon phase, but knowing each other's wishes in the event of a death can make life easier in a turbulent time. Already have a will? Update it after you get married. Estate laws differ depending on the state you live in, so if you move to a different area you may want to review any existing wills.

Talk about caregiving

In today's society, multigenerational households are on the rise. Talk to your partner about what he or she wishes for aging family members, especially parents. You may expect that a parent will live with you at a certain age, so it's wise to bring up that subject with your spouse. It can also help you in determining if you will need to save extra money, say, to build an in-law suite in your home.

From this day (financially) forward

Now that you have a better idea of how important financial decision-making is for engaged couples and newlyweds, you can go forward to cover all the bases necessary to ensure your marriage starts off on a sound financial foundation. Whether you choose to utilize a financial planner or not, this gives you a good framework from which to start.

Share this guide and the resources in it with your partner so you both understand the importance of establishing your financial future together.

“You're not just going to have a talk," Dr. Eaker Weil adds. “You're going to establish goals and work on behavior modifications together and know that it will help you grow."

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