When Logan Allec and his wife got married, they brought up money from the get-go. The pair made a pact: They would each have a set amount of money to spend on whatever they wanted.
Whether it was $50 or $100 a month, it was the financial equivalent of a hall pass. No questions asked. No accusations made. And there was no snooping to look at what they pulled from the bank account.
That would prevent resentment, judgment, and getting tiffs over seemingly small potato stuff — like indulging in a daily coffee fix.
“No matter how tight money is — or whether you choose to keep joint or separate accounts — it’s important that each of you have a certain amount of money every month that you can spend on whatever you want, “says Allec, who is the founder of Money Done Right. “But within reasonable limits of course.”
When it comes to money and marriage, sussing out how much of an “allowance” each partner gets is the tip of the iceberg.
Getting hitched is a major milestone, no doubt. And alongside the jumble of excitement mixed with a bit of nervousness, you’ll want to make sure you have your financial ducks in a row. This includes having the proper paperwork in order, going over insurance, and coming up with a spending plan.
For the newly wedded, here are a handful of things to mull over, money-wise:
Come up with a budget
You’ll want to come up with a plan on how you’ll go about divvying up shared expenses.
For instance, Jarek Grochal and his spouse had this talk pre-wedding bells. They kept things pretty simple: They split the rent in proportion to their incomes. The rest of the expenses were up to each person.
Besides how you’ll share your living expenses, you’ll want to decide whether you’ll have a joint bank account or separate ones.
As couples financial counselor Adam Kol, J.D., explains, there’s no right or wrong way to go about this. It’s more about preference, and what could potentially incite deeper resentment.
And just because you don’t have a joint account doesn’t mean there’s less communication or trust in the partnership.
Case in point: While Grochal and his spouse didn’t have a shared bank account, they did hash things out about shared savings goals.
“We keep an open line of communication around where we are financially, and discuss any big-ticket purchases we want to make before splurging,” says Grochal, who blogs at Time in the Market.
Don’t be afraid to talk about money goals
Numbers, budgets and spreadsheets are one thing. But what it all boils down to is how your spending plan matches up to the vision of your shared life together.
“Before you get to the numbers, get on the same page first,” says Kol. “Talk about your priorities, your hopes and dreams, your worries and fears. This will make the budgeting exercise easier, as you’ll see how it directly connects to the goals you two share.”
For instance: What kind of home do you want to own? Where do you want to ideally live? And do you want a house full of pets, or babies, or both?
As Grochal and his partner both prioritize retirement, they automate contributions for their home.
“My wife knows I put 15 percent of my income into my 401(k), save $X per paycheck, and invest in a separate account,” he says. “And my wife puts 10 percent of her income into her 401(k), and puts $X per paycheck into a home fund. Once that’s all settled, she and I can spend money on whatever we want.”
Approach budgeting as a team sport
When Nick Loper and his wife got married, they kept separate accounts and one joint account for shared expenses.
A game changer? They look at money management as a team sport. They now pool almost all their money together, and focus on personal profitability.
“Out of everything we bring in, how much is left over after expenses?” says Loper, the founder of Side Hustle Nation.
It’s become a fun challenge to become more profitable as a household, which we’ve tackled from both the expense and earning extra income side.
Have regular financial check-ins
Coming up with a plan is one thing. But sticking to it, and making changes along the way is just as important.
To get on the same page financially, consider setting up a weekly money date. You can go over goals, and come up with a reasonable personal spending account for each of you, explains family money coach Laura Coleman.
“Your weekly money date should help you clearly define your needs, wants, and expectations,” says Coleman.
It’s also an opportune time to check in about shared goals. “Each week, revisit your goal and see how you are reaching it and if you’ve had setbacks,” she says.
“Brainstorm ways you can create multiple streams of income to reach that goal. Remember that you are a team, so make decisions as a team.”
Think about getting life insurance
When you hit the marriage milestone, someone else might now lean on you financially. In turn, you might want to consider hopping on a life insurance policy.
There are two main types of life insurance: term and whole. Term insurance covers a period— 10, 20, or 30 years. It’s usually used to cover the length of a mortgage, or to make sure the financial needs of your kids are met until they graduate from college.
Whole life insurance offers payouts your entire life. But that means term life insurance is typically a lot less expensive.
Another thing to keep in mind is reevaluating your policy limits as you grow your family.
And life insurance isn’t just for couples who are going through other significant life changes.
Another reason why you might want to consider life insurance? If one partner makes a lot more than the other. Should one partner pass, your life insurance policy can help you maintain the same lifestyle.
“We thought life insurance was a good idea simply because we wanted each person to be able to live a similar lifestyle if something happened to the other,” says Grochal. “It would be terrible to not only lose my loved one but also to suddenly have to worry about money and bills because we weren’t a two-income household anymore.
There’s a ton to get your head around when you tie the knot. But fear not. By knowing what you need to consider when you hit the marriage milestone, you’ll be able to chunk it down into steps.
In turn, you and your life partner will be equipped with the know-how to make the best money decisions for your new life together.
Shop for car insurance
Getting married could potentially save you some cash on your car insurance policy. In fact, it turns out that, on average, premiums for car insurance were 11 percent cheaper for those who were married.
Why’s that? Data reveals that single drivers had a higher driver injury rate than those who were hitched.
For example, when James Lowery and his wife got married, they switched insurers, and his car insurance policy dropped from $437 a month to under $280. Pre-marriage, he was a notorious speed demon. He once got four tickets within three days.
“My insurance partly went down partially because I swapped companies, but also because in their eyes, marriage made me less of a risk,” says Lowery, who writes at Rethink the Rate Race. “I suppose the insurance company believed that with the stability of marriage, I would stop my speeding habits.”
Having said that, marriage might not make you a safe driver. It’s more a correlation than causation.
No matter what the case, take advantage of the fact. After you get married, reach out to your insurance carrier to get a new quote. Or you can shop around for quotes from different companies.
Your insurance premium isn’t only affected by getting hitched
There are plenty of other reasons why your insurance premium might drop after you get married:
If you uproot to a new adobe in a different area, depending on where you live, you could potentially save on your car insurance.
Add multiple drivers to the same household policy
Your premium will most likely drop if you shack up together and get on the same household policy.
Bundling different insurance policies (i.e., homeowners insurance and car insurance) could get you a discount.
In some cases, you might pay more for car insurance after you get hitched. For instance, Martina, founder of Stack Your Dollars, ended up paying $50 more a month.
Or if you drive separate cars and don’t anticipate using the other’s very often, you might keep your car insurance policy as is.
So whether you’re about to get married or you’re a newlywed, enjoy this time. But also remember to talk about shared savings goals to build the best future together.