Money and Marriage: How to Have the Money Talk

This article is an excerpt from the Shortform book guide to "I Will Teach You to Be Rich" by Ramit Sethi. Shortform has the world's best summaries and analyses of books you should be reading.

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How should married couples handle their money? Should you keep a joint bank account? Completely merge your finances? How can you bring these issues to the table in a constructive and non-intrusive way?

How much you choose to talk about money with your family is up to you. But if you have a serious romantic partner, conversations about money will be impossible to avoid.

In this article, you’ll find advice for three common sticking points when it comes to marriage and money: talking about money with your partner, paying for a wedding, and prenuptial agreements.

Talking About Money With Your Partner

Before you can dig into the nitty-gritty of your personal financial situations, you and your partner need to get comfortable with talking about money at all. That might be especially difficult if you’re not used to being open about your finances, or if you know that you and your partner have very different financial situations (for example, if one of you makes more money or has more debt than the other). However, if you approach the conversation with an open, humble, and nonjudgmental attitude, discussing money doesn’t have to be a scary thing.

To make these money-and-marriage conversations easier, start with general questions—like how your partner thinks about money in general, how their parents talked about money, or what their ideal financial situation would be. Put them at ease by being vulnerable and sharing something about your own finances (for example, if you know you tend to overspend in a certain area, or if you’re stressed about your credit card debt). That vulnerability will encourage them to share openly in return. This conversation doesn’t have to happen all at once—it might take place over the span of several weeks. Either way, remember that the goal is for both of you to get comfortable talking about money and helping each other prioritize your financial health.

Once you and your partner are comfortable talking about money in general, it’s time to dig down into specifics. Sit down with your partner and openly discuss your salaries, savings, spending habits, debt, and financial goals. Here’s an example of how you could approach this conversation.

First, start by talking about your short- and long-term financial goals. This could be anything from taking a vacation next year to going back to school or supporting your aging parents. You should also get clear on the kind of lifestyle you’re hoping to live—will you spend thousands every year at bars and restaurants, buckle down to save as much as possible and reach FIRE at 35, or something in between?

Once you’ve both had a chance to share your goals, discuss your spending habits. Again, you can put your partner at ease by going first. Show them your plan for spending, including any areas where you feel you could improve, and ask for their feedback. Talking about your plan will naturally open the door to discussing your debt, savings, and investments (since you’re making automatic payments to all those accounts each month). At this point, you can also talk about how you’ll handle joint expenses if one person makes more money than the other (for example, if you make more than your partner, you might split the rent payment 60/40 instead of 50/50 so that you’re both putting the same percentage of your monthly income toward rent).

Finally, when you’ve worked through all the details together, end the conversation on a positive note by setting up a few savings goals together, like a tropical honeymoon or a bigger apartment. As you continue having conversations about money, you can get more specific about these goals.

This has the added benefit of making it easier for you to bring up concerns about your partner’s spending habits down the line. If you’re worried that your spouse is spending too much, you can remind them of your joint goals (and how important those goals are to both of you) rather than directly accusing them of spending too much and making them feel judged or attacked.

Paying For a Wedding

Studies show that the average American wedding costs somewhere around $35,000—and that the average American thinks their wedding won’t cost nearly that much. But when it comes time for the big day, most people end up paying far more than they planned on all the details that go into a wedding. Those costs can add up quickly, and they can even put you into debt if you don’t plan ahead.

Instead of assuming that you will somehow beat the average and have a truly simple, low-budget wedding, take those statistics to heart and start saving for your wedding now—even if you’re not engaged. You may feel silly doing it, but you’ll be far better off than if you just assume you’ll somehow have an extra $35,000 on hand when the time comes. Plus, if you don’t end up spending that money on a wedding, you can always put it towards a different savings goal.

To figure out how much you should be saving for your future wedding, start by estimating when you want to get married (for reference, the average age at marriage is 27 for women and 29 for men). Then, use that estimate to figure out how long you have to save, and divide the total wedding cost by that number.

For example, if you’re 24 and you plan to get married at 29, you have five years (or 60 months) to save up enough money. Assuming you’re paying for the entire wedding yourself, that means you need to save $583.33 every month for the next 60 months.

Prenuptial Agreements

Prenuptial agreements (or “prenups”) are legal contracts that two people sign before getting married that dictate how their assets will be divided in the event they get divorced. Typically, people only sign prenups if one partner has a much higher net worth than the other, or if one partner owns a business. That way, if the relationship ends and things get contentious, the richer partner won’t lose the wealth they accumulated prior to the marriage as part of the divorce settlement.

There is a cultural stigma against prenups: They’re considered unromantic because people see them as a sign of doubt that the marriage will last. It’s true that no one wants to think about the possibility of divorce before they’re even married, but it’s also important to keep in mind that marriage isn’t just about love—it’s a binding legal contract. And like any other legal contract, it’s important to make sure you’re protected from potential losses before signing.

If you own a business or have significantly more wealth than your partner and you do decide to sign a prenup, you’ll need a plan for how to bring up the subject with your partner while still reassuring them that you don’t intend to ever have to use it. Before springing that conversation on them, make sure that you and your partner are comfortably talking about money on a regular basis and that you’re both completely transparent about your own finances. Then, when you’re ready to talk about prenups, here’s how to do it:

First, reassure your partner that you’re marrying them because you want to be with them forever and that you don’t see divorce in your future. You may need to come back to this point several times as the process unfolds—especially once lawyers get involved.
Second, take responsibility for your decision. It might be tempting to blame it on your lawyers, but being dishonest will only make the process harder.
Third, explain your reasons for wanting a prenup (typically because you want to protect the business you built before your marriage).
Fourth, don’t be afraid to get help. Talking about prenups can bring up a lot of difficult emotions for both of you, and a professional marriage counselor can help give you the tools to communicate those emotions in a productive way.

Money and Marriage: How to Have the Money Talk