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To love, honor and merge your finances

From the day you get engaged to the moment you say "I do" there's so much to discuss and plan. In addition to the wedding venue, the caterer and the honeymoon, there's one more thing you'll need to talk about. Money. How have each of you managed it in the past? How do you plan on managing it together? And what are your plans for it in the future? Considering that studies show money issues can strain a couple's marriage at any level of wealth,1 getting things out in the open now could improve your chances of having a strong, honest and successful relationship.

  • Managing money and marriage
  • The perks of prenups
  • 5 tips for wedded bliss

The past: Getting to know each other. All over again.

You might think you know everything there is to know about your significant other. That is, until you consider finances. If you take the time to get everything out on the table now, you'll have a clearer picture of your financial future together. Start by completing the Net Worth Statement Worksheet and consider sharing the following information with each other:

  • Credit scores
  • Existing debts
  • Insurance plans
  • Interest and dividends from investments
  • Salaries or self-employment income
  • Other sources of income (e.g., trusts, family support)
  • Any additional money either of you expect to receive
 
  • 20%
  • 50%
  • 80%

What percentage of spouses commit financial infidelity by lying about
their spending?2

You're right!

According to a survey done by Harris Interactive, nearly 50 percent of spouses admit to hiding purchases, credit cards and bank accounts.
As of: February 18, 2014

Not quite.

Nearly 50% of spouses admit to hiding purchases, credit cards and bank accounts, according to a survey done by Harris Interactive.
As of: February 18, 2014

What percentage of consumers
did not know their spouse's
credit score?3

Click to find out
45%
22%

of Gen Y married people do not disclose debt to their spouses.4

 

The present: Mingling mind-sets and money

A marriage is a union of two people. This means the possibility of two different mind-sets. Two different spending habits. Two different levels of wealth. But managing finances together successfully requires consideration of each other's views and compromise. Once you understand each other's approach to money management, you can begin determining how you plan on managing your money together. What will your day-to-day budget look like? How will you handle cash flow? Whose health coverage will you choose? What changes need to be made to your retirement plans and life insurance policies? Marriage affects many areas of your financial situation, so make sure you consider all the issues.

Bank accounts: Joint? Separate? Or both?

A key consideration for married couples when approaching money management is whether to have joint or individual bank accounts. In the past, it was customary to have a single joint checking account, with each spouse using it as needed. But times have changed. Today, both spouses may work or have significant additional income, so it's common for spouses to keep separate accounts, as well as to have a joint checking account for household expenses and possibly a joint savings for major purchases or travel. Each person deposits income, such as salary or earnings, into his or her individual checking and/or savings account and then contributes an agreed-upon portion into the joint accounts. It's a solution that allows each spouse to share in the responsibilities and still retain some independence.

What percentage of divorced Americans
would ask a spouse to sign a prenuptial agreement if they remarried?5

Groom + Bride + Prenuptial Agreement =
Click to find out 49%

The perks of prenups

One of the most important questions to answer is whether or not you need a prenuptial agreement. Although the topic may seem awkward to bring up at this exciting time, it can provide a way to address philosophical differences and set expectations. A prenuptial agreement can help spouses manage financial responsibilities, protect the finances of the spouse with substantial wealth, safeguard family-owned interests or an individually owned business and limit liability from a spouse's debt obligations.

Credit Cards

Credit card considerations

Here are some facts you both should think about before you add your names to each other's credit cards:

  • You will be assuming your spouse's credit card debt
  • Your spouse's credit rating will impact your own
  • You will become liable for any charges your spouse makes on your card

The future: How to live happily ever after.

From the minute you walk down the aisle arm-in-arm, you and your spouse will be headed toward the future together. So what do you want it to look like? How much do you want to have at retirement? How will your assets be distributed upon your deaths? Setting investment goals and planning your estate is essential for virtually everyone, especially those with significant wealth. Take the time to sit down with your Bank of America Private Bank team, who will work with you and your spouse to develop an investment strategy and an estate plan that helps you achieve your objectives. In the meantime, read more about Estate Planning and Trust Basics on this site. Of course, even after you've educated yourselves and created a plan for the future, it's still necessary to check in regularly with each other to discuss where you are financially, as goals and needs may change through the years.

5 tips for wedded bliss:

CLICK THE ICONS TO FIND OUT WHAT THEY ARE
  • 1

    Honesty

    Be honest with your partner. It's important when it comes to all areas of your relationship - even money.

  • 2

    Set Goals

    Make a plan and work as a team to achieve it - from living within a monthly budget to investing for the future.

  • 3

    Check In

    Plan regular check-ins to discuss finances, as goals and needs may change over time.

  • 4

    Agree

    Agree on a level of risk you're both comfortable with when it comes to investing. Don't ask your spouse to accept risk that's uncomfortable to him or her. After all, investing is about building wealth, not anxiety.

  • 5

    Share

    Divide and conquer. When you and your spouse share financial responsibilities, you both have a grasp on your financial picture, not to mention a stake in it.

What's yours is yours and what's theirs is theirs —
except when it isn't.

The way you take title to property has legal implications, whether you're talking about real estate, bank accounts, investments or personal property. One common form of title is separate property, where you take title to something in your own name only. You can also title accounts and other property as joint tenants with rights of survivorship (JtWros), which means when one of you dies, the account or other property will pass automatically to the survivor. Lastly, there's community property, which is a form of ownership in certain states, such as California, Texas and Washington, that refers to anything you acquired after marriage.