Everyone knows one of the benefits to getting married is that it changes your tax filing status—which could potentially increase your tax return. Hello, spring break planning!
But marriage impacts your financial life in other ways too. So much so that fights about money are the second leading reason why people end up divorced.
That’s why we asked Marsha Barnes, a financial educator and owner of The Finance Bar, to share some insights on things newly married people may not be aware of when it comes to their wedded bliss and their bank accounts.
The way you think about money may change
For most people, money is a means to an end: You work 40-plus hours a week to get a paycheck, which you turn around and use for rent, bills, and maybe a few nights of overpriced eating out.
But once you get married, your thinking may shift, Barnes says. “When I first got married, at the time I don’t think I really thought about what money could really do for my life,” she explains. “I worked in corporate America for many years. But when I had the support of my husband to start The Finance Bar, I began to think about how this could increase my income, which [ultimately benefited] my entire household.”
When two people are on the same team financially, she explains, they start to consider things like how they can utilize money more effectively and what are ways they can make their money grow.
“You think about life beyond today,” she adds.
Your financial confidence grows
As the old saying goes, two (incomes) are better than one. If you’re financially confident, losing a month’s worth of income will feel more like a (major) inconvenience than an emergency, Barnes says. And considering more than 800,000 people were recently impacted by a 35-day government shutdown, it is certainly something to be concerned about.
Your spouse’s debt doesn’t become yours—but it may still effect you
If your partner has a ton of debt, you may find yourself hindered financially. Various activities, including vacationing, growing your family, saving for retirement, and purchasing a home, may have to be put on hold as you work on paying down that debt.
“When your spouse has a lot of debt, it limits your disposable income,” Barnes says. “That’s when arguments begin because now you’re not able to enjoy life [as you want]—you’re just a married couple who is paying bills.”
You dream bigger
Having a partner means you’re better situated to achieve your dreams—both individual ones and those you have together. Barnes explains, “When you sit down and plan you can say, ‘These are the things that are in front of us now, and we need to make sure we’re handling our money successfully now. And in three to five years, these are some of the things we want to look at, and how do we get to that place.’”
Barnes adds, “A lot of times, you have dreams as a couple but what we fail to do is plan. And as a result, they stay dreams on paper and never materialize.”
Being transparent about your money habits and spending history may help you grow closer
“Money can be a sensitive topic for many people, especially if you feel like you don’t earn enough, you don’t have enough saved, or maybe you don’t have a portfolio of investments,” Barnes says. When you make the effort to have these important conversations, you show your partner you’re willing to be vulnerable with them. Suddenly, she adds, “your debt” becomes “our debt” and “we’re going to tackle this together."