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Over 50% of marriages end in divorce, and the number one reason given for the splits is disagreements over money. So what do you think–maybe it’s a good idea to consider the role of money in your marriage?

Whether you’re pre-engaged or celebrating your golden anniversary, the following guidance should help make money a helpful supporting cast member in the story of your relationship–not the villain.

Before the Big Day [or] For Richer Or For Poorer:

Even before you start shopping for a ring, it’s important that you and your prospective spouse take the step in trust that is full financial disclosure. Yes, this means you should both know what the other earns, owns and owes before saying, “I do.”

Please note that the purpose of this exercise is not to use money as a measuring stick or shaming opportunity, but to take a step in vulnerability–and ensure everyone knows what they’re getting into. This is important for every couple, but vital for blended families where there may still be financial implications attached to previous relationships.

But even more importantly, we must also go beyond the numbers to learn more about how we process financial decisions. We’ve learned through the field of behavioral finance that most of our financial actions–for better and worse–are a result of how we’ve been shaped by our life experiences, especially those early in our earlier years.

By conducting a quick exercise called the Personal Money Story, you can trace these formative financial experiences. First, complete it apart from your beloved and enjoy a dose of profound self-analysis. Then, share your story with your spouse.

The reason this is such an important exercise is that we have a tendency to demonize each other for our financial failings, labeling one another as a spendthrift or a stingy…you fill in the blank. But when we see each other as we are–a collection of our life experiences, we can take steps forward with a healthy dose of empathy.

For example, both my father and my wife’s father grew up relatively poor. After becoming the first of their respective descendents to graduate from college–a financial burden they each bore individually–they became successful professionals. As parents, however, my father (understandably) felt it was his responsibility to ensure his progeny felt the sting of want (to keep us hungry)–while my father-in-law (justly) sought to shield his kids from the deprivation he felt growing up.

How do you think that worked out in our first year of marriage?

Hitched [or] His and Hers or Ours?

Once we’re married, we enter the realm of practicality. But before we get to the to-do list, let’s answer the big question that will have an impact on the next steps you take:

Joint or separate? Are you going to join your finances or attempt to maintain them separately?

First, it’s important to note that there are elements of these decisions that may be determined for you, according to state laws and the titling on any assets over which you don’t have control (like a trust or assets you own jointly with someone other than your spouse). While it certainly isn’t romantic, it may well be wise to review these implications with an attorney.

Next, you must decide how household cash flow will be handled. Will you have a single joint account where your respective paychecks land and bills are paid? Or will you maintain separate accounts and handle household expenses in a predetermined way?

Ultimately, whatever works best for you works–but I will offer some commentary based on many years of experience working with families:

Consider merging your finances as you’ve merged your lives. Create a joint checking and savings account that will be the primary receptacle for household cash flow. Then, have secondary accounts–or budget line items–for each spouse that will help preserve a degree of financial independence.

I do not recommend making these individual accounts, however, unaccountable. A degree of independence is helpful, but secrets can be marriage killers.

Once you’ve gotten past that big decision, here are a host of important to-dos that will help ensure your marriage gets off on a firm financial footing:

  • Update account titles if anyone’s name changed–after your forms of identification are updated.

  • Update the title on major assets, like houses and automobiles, as appropriate. In addition to being a heartening metaphor for this new union, this step helps ensure that these assets wouldn’t get stuck in probate in the case that a spouse dies unexpectedly.

  • Update your beneficiary designations for any existing retirement accounts, annuities and life insurance policies, as appropriate. You’d be surprised how many married 30-somethings still have Mom listed as their primary beneficiaries!

  • Have estate planning documents updated or drafted. Nobody feels like they need estate plans before they have an estate, but this is a big one. Yes, a will will help direct the flow of your assets if something happens to one or both of you, but even if you don’t have any notable assets, a durable power of attorney will enable each spouse to make financial decisions on behalf of the other and advance directives allow you to make those impossible end-of-life decisions so your spouse isn’t put in that difficult position.

  • Update or purchase life insurance. If both spouses are working, consider buying enough life insurance–for each spouse–to pay off any household debts, mortgages and/or rental costs for a few years with cheap term life insurance. But be aware that once you have kids, you’ll be talking to your insurance agent again as the math changes when your family multiplies.

Lastly, I implore you, new married couple, to live below your newly collective means. Well below! If you’re a DINK household (dual-income-no-kids), it likely feels like you’ve gotten a meaningful raise when you consolidate two incomes under under one roof. But once those cute kiddos come along, you will inevitably see a reduction in household income while your expenses charge northward.

Therefore, if you want to build a meaningful financial buffer for your future, try to live off of as little as 50% of your household income, using the surplus income to aggressively pay down any debt you might have married and jumpstart your savings for a low(er)-stress future!

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