For richer, for poorer and for personal finance

The idea that opposites attract might make for great wedding toasts and tales. But when it comes to money management, newlyweds who share the same approach to money are less likely to see their marriages end in divorce.

In fact, research done in 2012 at Kansas State University revealed that arguments about money – regardless of couples’ income, debts or net worth – is the most significant predictor of divorce.

In honor of Valentine’s Day, KeyBank offers newlyweds the bank’s best wishes for a long and prosperous union and some suggested steps to help couples make confident financial decisions:

To debt do us part, and other unromantic topics

Ideally, newlywed couples make time to talk through their personal financial situations before wedding bells ring so there’s no post-ceremony reveal about each other’s financial situation.

At the very least, couples need to come clean about any outstanding debt they bring to the marriage, and their specific plans for paying down that debt. Failing that, however, newlyweds should still make time post festivity to talk through finances.

Yours, mine and ours

Marriage rate data highlights trends that are particularly relevant for new couples’ approach to personal finance:

• The percentage of couples delaying marriage is the highest it’s been in more than a century, according to a 2015 report by the US Census Bureau.
• The percentage of women marrying later outstrips the percentage of men of the same age, according to data from the National Growth.

This means more couples are coming into married life with separate incomes and equally independent attitudes about savings, spending and investing.

It also means couples need to give themselves some time to think through how they will manage money.

Rather than immediately co-mingling all assets, couples should consider establishing a joint account for shared expenses (rent or mortgage, property taxes, utilities, car payments) and separate accounts for personal expenses.

Have a plan (or plans)

Once couples have settled on where they are moneywise, they should focus on where they want to be moneywise. Certainly most newlyweds became couples in part due to common goals and values, such as wanting a certain lifestyle, planning to have children or wanting to retire sooner rather than later. Personal finance plans serve as roadmaps to get couples from start to destination.

The planning process starts with setting a household budget based on income adequate to cover expenses. Next is setting short-term goals such as establishing an emergency fund or paying off student loans and credit card debt, and deciding how to meet those goals. The same process applies for long-term goals such as paying for childcare (or managing expenses on one income), saving for college and saving for retirement.

Money can’t buy you love

Marriage is compromise, and that goes double for personal finance. Getting money management differences on the table gives couples an opportunity to develop an understanding and appreciation of each other’s approach to personal finance.

By acknowledging and understanding differences early on, couples improve the odds they can avoid personal and painful conflicts over money.

Steven Carter manages the KeyBank Cortlandt Branch and can be reached at steven.carter@keybank.com