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5 ways newlyweds screw up finances

There will be plenty of ironing out to do as you merge your pocketbooks.

By MSN Money Partner Oct 12, 2011 9:28AM

This post comes from Chris Birk at partner blog Wise Bread.


My fiancé and I are in the waning days of what seems like the longest engagement in relationship history.


Considering that we're paying for our own wedding, my fiancé and I have talked a lot about finances the last two years. In fact, looking back on the process, that constant communication is actually one of the best things to come from footing the bill ourselves. We've had no choice but to make tough choices and talk honestly about where we were, where we are, and where we're heading financially.


Turns out not every couple is so lucky. Academics might debate whether money is really the leading driver of divorces, but there's no doubt it plays a part, if not a starring role, in many separations and splits each year.


I'm still pulling for the fairytale ending, but to be sure, I started poking around into some of the common mistakes newlyweds make when it comes to money. Here's a look at five of the big ones. (See also: "How to be happy and married: 24 tips from a 24-year marriage.")


Not talking money with your spouse. Avoiding the topic altogether is a surefire way to fail in post-nuptial finances. Discuss your financial goals, burdens and budget ideas well before you head down the aisle, or if not, as soon as possible post-honeymoon. If you're coming into the marriage with a lot of debt, whether from student loans or credit cards, you at least need to be upfront about it with your partner. This applies before and during the marriage as new issues emerge. (Will you be able to pay back your student loans?)


Giving one person all the power. When you decide who will physically pay the bills, file the taxes, watch your investments and accounts, and make sure you stay on budget, it's wise not to put all those eggs in one partner's basket. While one person can take primary responsibility for such tasks, the other spouse should always maintain involvement and awareness when it comes to money matters. In case something happens to you or your spouse, you should both be aware of your account information, passwords, bill due dates, and any other necessary financial information. Post continues after video.

Not creating a budget or joint financial plan. It's not easy to merge two incomes, spending habits and saving habits into one household, so it's essential to draft a basic budget plan early in your marriage -- or even before, if possible. Start with a basic budget worksheet, in which you detail your income; essential expenses such as rent or a house payment, food, and insurance; and flexible expenses. Track your spending as a couple for several months and revisit the budget, tweaking if necessary to make sure it works in practice.


Fighting over small money matters. Picking your battles can be one of the toughest things to do in any relationship, but when it comes to money in a new marriage, it is critical to keep you both sane and from going broke. There will be plenty of ironing out to do as you merge your pocketbooks, but arguing with your spouse because he or she spent 50 cents extra for a box of brand-name popsicles won't make the process easy for either of you.


Not preparing for emergencies. There's no way you can mentally, physically and fiscally prepare for every possible scenario to confront you as a married couple, but saving some dollars for a rainy day is always helpful. This may be hard to do as you're paying off a wedding or any other premarriage debt you may have, but starting small and then building up as you can, making sure saving is a routine part of your marriage, will be incredibly helpful in the long term.


This list is by no means exhaustive, so please feel free to share your advice and experience below.


More on Wise Bread and MSN Money:

Oct 12, 2011 5:09PM
My wife and I just got married a little over 4 months ago.  We set up a budget within about a month of the wedding and have been sticking to it for the most part.  One other thing we set up in out budget is a portion of money every month to go into the "MIP" fund (Marriage Insurance Premium, we got the idea out of a book).  It's a small equal amount aloted to both of us individually each month to spend however we want, and it rolls over each month if we don't spend all of it.  It gives us some individual spending freedom each month within our joint budget and I believe it has prevented a lot of arguments.
Oct 12, 2011 7:34PM
I can attest to most of what this article states.  My wife and I married in 2008 (2 months after I loss my job and 2 months before she started her job).  We shared my bank account and credit card with her while she was in law school and we currently share everything.  My wife earns 6 times more than I ever did, but job is very demanding.  Since her income was so high, she originally wanted to not live on a budget.  After 6 months, we discovered that we were saving a dime outside of our retirement accounts.  We started a budget and we revise it each year.  We now max her 401k, her Roth IRA, my IRA, our HSA, and we manage to save $2K per month for our discretionary portfolio.  Years before we got married, we discussed living on one income and that we'd put my DIY traits to the test.  Currently, I do all the housekeeping (laundry, cleaning, shopping, cooking), the driving, the car maintenance, the financial management, and the house hunting (we've been looking for our first house since 2004).  Unfortunately, my wife prefers to leave everything up to me and has no interest in know what and where our accounts are held.  We always had an emergency fund, so I know we did that right.  Lastly, we used to have heated talks about her overspending.  In prior years, she'd spend $32K a year on shoes, handbags, and clothes...her budget was only $12K.  Clearly she's the spender and I'm the tax-break, but we're getting better and we decided to try to be more supportive about the issue. 
Oct 12, 2011 6:39PM
He could've saved a lot of time by just saying "don't be an idiot"
Oct 12, 2011 5:45PM
Be honest and open about your money, both should have separate accounts, one pays the mortgage and a few bills, the other partner pays the groceries and utilities and a few bills. Having separate accounts and paying separate things is good for both of them. If there is only one account and the husband controls it all, then 5 or so years later if they get divorced, the woman has no financial money trail, no credit rating etc.
Oct 13, 2011 4:28AM

this will not work for everyone but it did for us. i pay the house and my car she gives me 600 a month to pay the bills. she pays her car, done. we have been doing this since before we were married. hers bills are hers and mine are mine end of story. we don't talk about it, everything is cut and dry. your half my half.   



" false hope and shallow promises "    what any good relationship is built on.......


10 years married 15 together



Oct 12, 2011 6:24PM
I have always liked the idea of yours, mine, and ours. Figure out what the bills are each month and set aside an amount as an allowance for each person (when you have children keep this as part of the budget as well) Each person gets to use their personal money however they want. When it comes to things for the household, you both discuss it and after an agreement is made then a purchase is made.    As long as you talk and agree to it before hand there shouldn't be a problem.
Oct 13, 2011 7:57AM



The name of the book is "The Most Important Year in a Woman's/Man's Life"

Oct 12, 2011 7:45PM
My tips to Newlyweds, if you are fortunate enough to have a big wedding and gain a large sum of money at the Wedding, use it wisely. My ex Wife used all our $$ to pay down her huge Visa Bill and we ended up filing Bankruptcy anyway. 
Oct 12, 2011 5:47PM
May I ask, what was the name of that book?
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