Articles dealing with finances and marriage − specifically for newlyweds − usually pop up everywhere around springtime when wedding-fever is in full color: how to combine accounts, whether or not to think about a prenup, how it’s important to not start off your marriage in debt from a $30,000 wedding, blah, blah, blah.
Even if the advice and suggested discussions with your new-to-be spouse actually take place − according to the 2010 American Express survey, 12% of spouses have never actually spoken about finances even once − there’s not much talk about what happens afterwards.
- Do couples have these discussions once and then live in money marital bliss?
- Does having periodic financial arguments lead to the dreaded d-word?
I’m in the fortunate, well-documented position to have started this blog just months before getting engaged. So I thought it’d be neat to look through old posts where I talk about our couples’ money and see the evolution of handling it together over the past six years.
From a live-in couple, to engagement, to six years deep in our marriage, how have our finances evolved? What’s life thrown at us, and how did we deal with it together? What’s changed? What hasn’t worked?
Finances and Marriage: Splitting Things About Evenly in Pre-Engagement
Paul and I decided to live together before getting engaged (one year after moving in together he popped the question).
That means that the two of us had to deal with money together despite not combining finances and despite not being in a committed marriage. Bills needed to be paid, fairly, especially if we wanted the relationship to blossom further.
I don’t remember all the ins and outs of it, but here’s what I wrote in my journal from September 9th, 2008 (after getting a job offer with a smaller salary than I had hoped) that indicates we were splitting things roughly down the middle:
- “Paul and I are sharing expenses, so it’s much cheaper for the both of us − definitely nice − but I need to know that I can make it on this salary on my own as well in case something happens.”
I also make references to things such as paying half of gas for our road trip to Arkansas for Thanksgiving, and Paul taking care of the cost of booze for our Christmas party while I covered the food. Also, it appears we each knew one another’s salaries from what I’ve written in my journal (I just loooovvvve being able to look back and read about my life!).
Finances and Marriage: Combining Finances + Debt as an Engaged Couple
Now that you’re up to speed on our pre-engagement years, here’s what happened after that:
Combining Finances: Within a month of getting engaged on June 18, 2009, I had us sit down for our first official financial talk. We disclosed our debts, savings account balances, as well as incomes to one another. Then we talked about our two biggest upcoming expenses and decided that we wanted to:
- Combine finances right away
- Purchase a home together
- Pay for our wedding in cash (without being engaged for longer than a year)
- Get out of our combined $25,000 debt load before heading down the aisle
It was a lot, in the same way that a Pee Wee baseball team winning the World Series would be a lot.
I even considered selling my engagement ring to make some of it happen.
Here’s what Paul had to say about this time period:
“I knew my fiancé was frugal, but I had no idea until we had our first marriage finance talk. I was dizzy. I felt like Alice stepping through the first door to wonderland. I always thought I was way above the grade of financial accountability, and here I realized I had to decrease my spending immediately and in a huge way. I was scared, and more than a little taken a back.”
“Combining everything is when I began to feel better. I knew a few things for certain. I knew that I was marrying the one. I knew that I will live and die with Amanda, so when she spoke of combining everything I felt better. It was very similar to the days when I was in the Navy and was told to do something I didn’t necessarily agree with, but I knew that I was not responsible for the results. In a weird way I was happy to let her handle everything, and I would intercede if things got bad. But to tell you the truth, they never did. Amanda is a great financial steward.”
“Unfortunately, what I did was give everything over to Amanda, without asking her feelings on the subject. She wanted a partner, and I just gave her the responsibility. I basically gave her all of the responsibility and did nothing in return. More than a few occasions I went to Half Price Books then Specs with no idea on what I had spent, and when she asked I just said, “Deal with it. This is what you wanted.” I still feel bad for doing that, but life is a process.”
Vehicle Situation Update and Lesson Learned: We were tested as a couple financially almost immediately upon engagement. Which isn’t a bad thing, by the way. After all, it’s nice to know early on in an engagement if the two of you can crack it when money gets super tight and the unexpected happens, right? In a nutshell, after plunking down most of my savings onto the down payment and closing costs of our new home, we learned why you shouldn’t spend everything you have for the down payment of a home. Instead, wait until you have enough for a down payment, as well as an emergency fund, because there is no guarantee that your car will not break down the following week (or insert any other financial catastrophe)!
How to Save Money on Your Wedding Part I: We had received the $8,000 first-time homebuyer’s tax credit (the one you didn’t have to pay back), and used this to buffer our emergency fund by $1,000, and to work towards paying down our debt ($7,000 was sent into his car note). So at this point, I knew we had to buckle down to be able to save enough to pay cash for the wedding. We were given a total of $2,650 from our parents for help and the rest was up to us.
Honeymoon Savings Goal: March and Final Tally: Oooohhh…did I mention that since we are both avid travelers (we met in Japan, after all), we wanted to have a once-in-a-lifetime honeymoon trip of 11 days to Austria? Where were we going to come up with the money for that? Well, it couldn’t come from our paychecks, that was for sure, as that money was already working triple time on paying for the wedding and getting us out of debt by our April 17th deadline. For one, we were generously gifted the airfare as a wedding gift. Still, we had hotels, food, and the rest to pay for. I set a honeymoon savings goal to come up with $2,500 outside of our paychecks, and the details are in this post on how that went down.
Finances and Marriage: From His’N’Hers Wedding Cakes to His’N’Hers Money
I’ll spare you the ooey-gooey, wonderful details and just let you know that we got married on April 17th, 2010, as planned. Unfortunately, our planned honeymoon did not happen until 7 months later because the Icelandic volcano erupted two days before walking down the aisle and our trip was grounded.
But boy, Austria was spectacular around Christmastime!
And we got to go on an unplanned honeymoon up to my family’s cabin near Penn State University in PA. Ahhhh, the memories.
Our Debt Checkup: The thing is, we had met our goals of paying cash for the wedding, securing a home with a down payment (though not 20%, which didn’t cost us PMI because it was a VA loan through Paul’s service in the Navy), paying cash for our honeymoon, and getting another beater car. However, we did not meet our goal of paying off the $25,000 in debt before walking down the aisle. We had only paid off $17,000, so there was $8,000 left to go.
Paul says, “My frustrations did not last that long. While we were saving every penny that we could find, I was worried that the good times were over, but we still had people over for parties, and family events, but I realized that I was a poor planner. Planning has always been my thing, but I never put that practice into money. So it was an adjustment to do as my family does, and ask people to bring their own booze.”
The Cost of Making Your House a Home: Average Spent in Your First Year of Home Ownership: Of course − something I think that nags lots of young homeowners − we had just purchased this home with all kinds of ideas for what we wanted to do to it as well as how we wanted to decorate it. Yet we didn’t have much money, especially if we wanted to meet our more important goal of debt freedom. Time for some more VIP living on average paychecks (plus debt)! Of course, it also helped that we listed essential home items on our wedding registry and received lots of lovely gifts.
Debt Reduction (aka, We are Non-Mortgage, Debt Free!): Just shy of five months after walking down the aisle, our dream of debt freedom was ours (except the mortgage, which was not part of the original goal). Forget the Electric Slide, it’s happy-dance time!
Our Credit Card Numbers Were Stolen: This is a common nuisance that can plague any couple. Unfortunately, it happened while Paul was on a business trip and he was unable to access our money without having to call the credit card company after each decline.
The Big Reveal: Did We Meet our Goal of Saving 50% of Our Take Home Pay in 2011?: Ever wonder what it’s like to pay off all your debt (I mean from a logistical standpoint…like what do people do with the extra money)? The coolest thing about having paid off all of our non-mortgage debt is that we then had room to set even cooler financial goals. Like saving 50% of our take home pay!
Financial Discussion Rules of Engagement in Our Household: Within a year and a half of our marriage, some financial discord starting creeping up. We had worked through these huge money goals together, ones that took enormous restraint on our part. Paul was much less vocal than I was about money, and I was too used to controlling finances because, well, it had always been my thing (plus as he mentioned above, he was all too happy to hand over all the responsibility of it to me). So even though we were making huge positive financial moves with our money, we started to feel the financial friction. This is the first post where I talk about it, but it had been building for a little while.
Finances and Marriage: Dealing with Huge Financial Changes, Both Intentional and Not
Because we had worked so hard to achieve money goals − and we actually achieved them − we wanted to start designing our lifestyles. Paul and I agreed it was time to take my business full-time at least for a few years.
If not now when we were financially stable, then when?
Avoiding the Financial Failure of Not Changing Spending Habits to Reflect New Reality: With such a huge shift − going from two incomes to 1.25 incomes − we needed to make some real changes. After all, I didn’t want to spend our lifestyle design away.
Contingency Plan “Husband Lost His Job” is in Full Swing: And then, just months after taking the plunge of me leaving my job (and without me earning full-time income at my business), Paul loses his. One positive out of this comes the realization that we had made the complete right move in buckling down and getting that $25,000 of debt paid off. Because it became obvious that our Debt Load Would Have Sunk Us in Unemployment.
Dealing with the Financial Friction in Our Marriage Yielded Surprising Results: About three and a half years after getting married, it was time to deal with the financial friction in our marriage. We had relationship debris in terms of money, both from external circumstances we were forced to deal with, and from how we chose to deal with money in general. I came up with a very surprising way to deal with the friction, which made all the difference.
Finances and Marriage: Overall Reflections from the First Six Years
The thing is, I’ve learned that couples’ finances are always evolving. But even so, you do need good foundations of how to deal with money and work towards things together. Events such as getting laid off happens. But if you know how to work together as a couple, then you can get through it and come out stronger in the end. Here’s what five years of marriage taught me about couples’ finance.I've learned that couples' finances are always evolving. But even so, you do need good foundations of how to deal w/ money & work towards things together. Click To Tweet
Out of all of this, I’ve made a Financial Intimacy kit built from experience and expertise in the area of finances. It’s what would have made a fantastic wedding shower gift (even better than our electric slow cooker − and we use that all the time now with the little kiddo in our lives). I encourage you to kick up the financial intimacy notch in your own relationship, whether married, living together, or engaged.