Communication is key to a lasting relationship. But how many newly engaged couples have conversations with their spouse-to-be about finances? Turns out, not many. Only around half of couples discuss money matters before making their way down the aisle.1 Below are a few things you should be transparent about with your partner. In doing so, you can get ahead of potential issues that may creep up after saying, “I do.”
The top money conversations to have before you get married
1. Establishing financial goals
One of the first money conversations couples should have is about their financial goals. Discuss short-term and long-term objectives, such as buying a house, saving for children's education, or planning for retirement. Understanding each other's priorities and aspirations helps create a roadmap for financial success.
- Set and track goals, build a budget, and more with Money Management. This free, intuitive dashboard is available to members of General Electric Credit Union (GECU) through our secure Online Banking and mobile app.2
2. Income, expenses, and budgeting
Open communication about income and expenses is crucial for financial transparency. Couples should share details about their salaries, debts, and spending habits. Creating a joint budget allows for better financial planning and helps prevent misunderstandings about money management.
3. Debt discussions
Debt can be a significant source of stress in a relationship. Couples should openly discuss any existing debts, whether it's student loans, credit card debt, or other liabilities. Understanding each other's financial history allows for joint strategizing on debt repayment plans, whether that’s refinancing a high-interest loan or transferring high-interest credit card debt to a low-rate card.
Some debt can negatively impact credit scores, too. If you or your partner don’t have excellent credit, it’s important to address issues like late payments or a high debt-to-income ratio – both of which can hurt credit scores. A good score will help you secure better rates on borrowing products, making borrowing for big purchases like a car or a home less expensive in the long run.
4. Individual and joint accounts
Decide whether to maintain separate bank accounts, joint accounts, or a combination of both. Clarify how bills and expenses will be divided and how discretionary spending will be managed. Establishing clear guidelines helps prevent disagreements about financial responsibilities.
- Did you know adding a joint owner to select deposit accounts extends National Credit Union Administration (NCUA) coverage? Protect your funds and learn more in our brief guide to deposit insurance.
5. Handling windfalls and setbacks
Discuss how windfalls, such as bonuses or inheritance, will be managed. Similarly, address how setbacks, like job loss or unexpected expenses, will be handled. Establishing a plan for both the good and challenging times is essential for financial stability.
While money conversations may not be the most romantic aspect of wedding preparations, they are undoubtedly crucial for building a strong foundation of marriage. By openly discussing financial goals, income, expenses, and other aspects of money management, couples can create a roadmap for the future. GECU is here for you during all of life’s big and small moments. From Money Management, refinance and balance transfer opportunities,3 and much more, you can trust us to be a solid financial partner to you and your spouse.