Getting married changes your financial life in profound ways. It’s not just that you’re living together or sharing expenses—you don’t need marriage to do that. It’s that your legal and tax statuses change. Your future choices also may well change due to what your spouse brings into the financial picture.
It’s smart to sit down with your partner well before the wedding to talk about these issues and do some financial planning. Granted, it’s not the most thrilling premarital activity. But the decisions that you and your future spouse make about how to handle money will have long-term repercussions for you—not just as individuals but as a couple.
Key Takeaways
- Partners should fully disclose their assets, liabilities, and credit reports to each other before marriage.
- Marriage can have major financial benefits, especially if you understand the best way to file your taxes as a couple.
- Learn your state’s laws regarding marital property, and understand how assets and liabilities acquired before and after marriage will be shared.
- Financial decisions around wedding budgets can affect couples for years—for better or for worse.
Before You Say ‘I Do’
Before you exchange vows, you and your partner should disclose your full financial circumstances to each other. Because marriage is a legal and financial decision—the government couldn’t care less how in love you are—you need to know what risks you are taking by binding yourself to another person.
Disclose all assets and liabilities as well as any responsibilities you have to members of your immediate or extended family. Both of you should obtain your credit reports and credit scores from all three credit bureaus. Sit down and review each other’s balance sheets together and discuss any concerns.
Decision Time
Once you know what you’re dealing with, you can decide how you’ll handle your finances in marriage. If one partner has considerably more assets or earning power than the other, a prenuptial agreement may be in order.
These contracts can protect premarital assets and provide for children from previous marriages. They can also establish responsibility for debts acquired before marriage and prearrange spousal support in case of divorce.
If either or both of you carry considerable debt, it’s time to make a plan for paying it off. One spouse’s premarital debt does not automatically become the other’s upon signing a marriage license, but that debt can still affect you after marriage, as it affects your joint expenses.
While marriage in and of itself has no impact on credit scores, common practices of married couples—such as seeking a joint car loan or mortgage, opening joint credit card accounts, or adding a spouse as a cardholder on individual accounts—can affect both spouses’ future credit.
If either of you has poor credit, come up with a plan for improving it. You can be co-borrowers and use both of your assets to qualify if you ever apply for an automobile loan or a mortgage together.
When spouses borrow jointly but one has poor credit, a lender may charge higher interest and fees than the spouse with good credit could have been eligible for alone.
Setting Joint Financial Goals
Even before you set up a house together, create a household budget that will help you achieve your financial goals. Now is the time to think about your answers to questions like these:
- What are your priorities in life, and how do finances factor into those priorities?
- What are your long-term career prospects and goals?
- Will either of you need financial support for additional education or time out of the workforce to work toward your goals?
- Will one spouse stay at home full-time or part-time to care for children?
- Do either of you have children from a previous relationship, and if so, what kind of financial responsibilities will you have for them?
- Do either of you expect to be called upon to support family members such as aging parents?
- At what age do you hope to retire, and what kind of retirement do you envision?
- Do you have different attitudes toward saving and spending? How will you manage those differences?
Even if you don’t know all the answers, it’s helpful to get a sense of where your partner stands and evaluate what you each might need to think about or research further.
Planning Your Wedding
How much you will spend on the wedding and who will pay for it are two of the first big financial questions that engaged couples need to answer together. Your decisions can have a major effect on how the marriage starts, which can set the tone for your partnership.
Who Pays?
Traditionally, the father of the bride pays for the entire wedding. But sometimes there’s no bride, sometimes there’s no father, and sometimes neither of the engaged couple’s families has the financial means to contribute to the wedding.
If you’re paying for the wedding yourselves as a couple, especially if you’re a young couple with little money saved up and many unmet goals, it’s important to establish an affordable wedding budget and adhere to it.
Even if you stick to your budget, be aware of how expensive they can be. The nationwide average cost of a wedding in 2024 is $33,000, but that stupefying figure varies greatly depending on the choices that the couple makes about the venue, the menu, the number of guests, and much more.
Issues to Consider
Sticking to a wedding budget can be harder than it sounds. Once you start researching wedding costs and talking to vendors, you might learn that the magical event you’ve envisioned costs double or even triple what you expected or can afford.
You then have to choose whether to go into debt, scale back your expectations, or get creative—or do a bit of all three. Does the wedding have to be on a Saturday? Do you really want to have 300 guests? If you’re crafty, can you make your own centerpieces instead of paying for them?
Ring Decisions
Deciding what to spend on wedding and engagement rings is also important. Ultimately, wearing a band on your ring finger is a symbol of commitment.
A simple band can be had for as little as $10—or you can spend $10,000 or more. The average cost of an engagement ring was $5,500 in 2023 but, according to a survey by The Knot, half of all engaged couples spent between $1,000 to $4,000.
You can have a family heirloom ring resized or reset, opt for traditional gold and diamonds or a modern alternative, shop at a major jewelry store or use an independent jeweler who does custom work.
Couples who opt for pricey rings should make sure they have enough insurance to replace the jewelry if it’s lost or stolen.
Financial Benefits of Marriage
Getting married has not only emotional benefits but financial ones. These can include reduced housing costs, savings on health insurance, and lower car insurance premiums.
These savings, in turn, can increase short- and long-term financial stability by providing cash for emergencies and the means to save for retirement.
In fact, married couples often have an easier time saving for retirement because a higher-earning spouse can contribute to a lower-earning spouse’s traditional or Roth IRA.
Married couples often establish new joint checking and savings accounts and may want to add the new spouse as a joint owner on existing accounts. Shortly after the wedding is a good time to update account beneficiaries to protect your new spouse.
Because of the legal and financial ties that marriage creates, financial openness and honesty in your relationship are important. If one partner blows the household budget, for instance, then owning up to it, not hiding it, is the best way to move forward. Honesty will allow you, as a couple, to discuss the circumstances that led to the situation, the best strategy for damage control, and how a similar issue can be prevented going forward.
Shared Financial Responsibilities
In a marriage, it’s common for one partner to the money. There are real dangers in this lopsided approach. What happens if one spouse becomes too sick, or even dies suddenly?
The other spouse may have no idea which accounts exist, what bills need to be paid, or what the passwords are to log in to their shared accounts.
It’s better to do financial tasks together at least some of the time or to trade off each month so both spouses can access every account and know how to manage the household’s money. A joint approach to finances also makes it harder for one spouse to hide income or overspending from the other.
If neither of you is particularly money-savvy, it may make sense to consult a financial planner to get on good financial footing from the get-go.
The Legal Side of Marriage
State law determines who owns what in a marriage. The law might not seem important when you first get married, but it will become a huge factor when one spouse dies or you get divorced. It’s better to understand how things work now than to be unpleasantly surprised later.
Most states are common law property states. If you live in such a state, it means that property and assets belong to the person whose name is on them, and that person can leave their property to anyone they want. You can own assets jointly or individually, but the type of title that you hold affects whether either joint property becomes entirely your spouse’s or you can leave your share to someone else upon your death.
In community property states, assets and debts acquired during a marriage belong equally to both spouses. However, assets that one spouse owned before the marriage—or that one spouse inherits or receives as a gift at any point—belong only to that spouse. Similarly, debts incurred by only one spouse before the marriage are not the other spouse’s responsibility.
There are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
If you didn’t sign a prenup but wish you had, you and your spouse can create and sign a postmarital agreement or postnuptial agreement (postnup). This is a legal document that lays out how assets will be divided should the marriage end. Similar to a prenup, it can simplify issues of inheritance and asset division and can eliminate the need for divorce proceedings.
Marriage also increases the importance of establishing wills for both of you—or changing your wills to reflect the marriage. You also need to add payable-on-death designations for all of your accounts so that your money can go to your spouse or another named beneficiary within days of your death.
These are very far-in-the-future issues (you hope), but why not take care of them now?
Marriage and Taxes
Married couples can file joint or separate tax returns. Using tax software to run both scenarios can simplify the decision of how to file to pay the least in taxes. Filing jointly is usually the way to go for financial reasons, but not in all circumstances.
A couple might prefer to file separately if they don’t want to be responsible for the completeness and accuracy of each other’s returns or if, for example, one spouse wants to maintain complete separation from the other spouse’s business.
Medical deductions for one spouse—if that spouse earns significantly less income than their partner—are another reason why it can pay to file separately in some years.
On the other hand, certain deductions and exemptions are only available to couples who file jointly.
If one or both spouses have student loans, deciding whether to file joint or separate tax returns can affect the size of student loan payments. For borrowers on income-based repayment plans, filing a joint tax return means that both spouses’ incomes will be used to calculate student loan payments, sometimes resulting in a higher payment than if they file separately.
But the key word here is “sometimes”—it depends on the repayment plan in question, the income discrepancy between the spouses, each spouse’s student loan debt, the difference in taxes owed depending on filing status, and other factors.
One tax benefit of marriage is the unlimited marital deduction, a provision that lets married couples transfer an uncapped amount of assets between each other during life and upon death without owing any gift or estate taxes.
What Happens to Debt When You Get Married?
Any debt each party may have before marriage remains separate unless the spouse is added as a co-signer. In this case, the so-signer may be liable if the debt is not repaid.
What Is a Prenuptial Agreement?
A prenuptial agreement is a contract entered into by a couple before getting married. This contract outlines each party’s financial responsibilities and property rights upon marrying. It also specifies how financial assets and responsibilities will be divided if the marriage ends by death or divorce.
How Much Does It Cost to Raise a Child?
According to the Brookings Institution, a middle-income family will spend an average of $310,605 to raise a child born in 2015 until they turn 17 in 2032.
The Bottom Line
Marriage is an emotional commitment. It’s also a financial and legal one.
Because of how state and federal laws are written, tying the knot can have significant consequences for your money. It’s important to make sure that you and your partner are on the same page about the assets and liabilities that you are bringing into the marriage, and about how you’ll handle money as a couple.
Getting these important conversations out of the way before the wedding means that you’ll start your marriage on the right footing, with no ugly surprises lying in wait. It will also set you up to have ongoing discussions about your finances over the years. These talks will help you stay on track to meet your goals and avoid the fear and stress that couples can experience about discussing money matters with each other.
With your finances in order, you’ll have the peace of mind to focus on taking the next step in your relationship, enjoying this special time, and building a life together.