5 Financial Dos and Don'ts for Married Life

Before you got engaged, you and your partner probably tackled some of the serious "life talks," whether it was where you should live or if and when you'd start a family. Behind the scenes of those big-picture discussions, of course, is money. Because in order to achieve any goal—big or small—you need to take stock of what you have and what you need to get there. Read on for five financial dos and don'ts that will help you prepare to take on whatever life throws your way—for richer or poorer.

Too many couples avoid talking about money—sometimes it's because one person fears being judged, other times it's just a lack of interest in personal finance. Either way, the first step in opening a dialogue is asking a few basic questions, like: What was your family's attitude toward money growing up? What are your short- and long-term financial goals? Where do you stand on opening joint accounts as opposed to keeping funds separate?

Then talk numbers, and be as up front as possible. "Try to create a situation where you feel safe and comfortable talking about your debt," says Roger Ma, CFP, author of Work Your Money, Not Your Life. "Maybe that means setting up a time for you and your partner to discuss, and prefacing that you don't want to feel judged by them, but you also want to be transparent about your situation so the two of you can come up with a plan." Plus, when it comes time for larger joint purchases, like buying a house or a new car, your credit history will be revealed anyway, he says. "Keeping financial secrets may keep the peace in the short term, but could ruin communication in the long run."

To help encourage that communication, Ma recommends couples put together a "financial report card," detailing your net worth, living expenses, credit scores and credit reports. (Many banks and credit cards offer free credit scores, and each person is entitled to a free copy of their credit report once a year.) Once you know where you both stand, you'll be better prepared to get where you want to be, and it can be helpful to repeat the exercise periodically.

Even if your attitudes toward money fall on opposite ends of the spectrum, it's important to agree to a basic blueprint for spending and saving. Make it a priority to sit down and create a monthly budget together. "Using a spreadsheet, app or both to organize your finances is okay—whatever works best for your working style and the way you consume content," says Ma. There's no one right way to keep track of your spending.

While every situation is different, Ma recommends the simple concept of trying to live below your means, or just spending less than you make. "Big-ticket items, like housing and loans, will make the biggest impact, but smaller expenses can add up as well," he says. "The rule of thumb is to spend no more than 28 percent of your gross income on housing. The lower your housing payment, the more money you'll have for other savings goals or general life flexibility."

As far as who's doing what, Ma says it's fine for one person to be the household CFO, but emphasizes the need for both of you to understand and feel included in family finances: "That way, if anything unexpected were to happen, the other partner will have an idea of the state of the finances and 'where the money is.'"

Life is full of surprises, and the best way to protect yourself from unforeseen expenses is by having a healthy savings account to tap into when you need it. Like many experts, Ma recommends building up three to six months of living expenses. "Having an emergency fund allows you access to money to pay for a medical procedure or fund your living expenses in the case of an unexpected event," he says. That doesn't mean you should stop contributing to a retirement plan or stop paying down your credit cards as you save—just put away whatever you can, even if the amounts are small. Before the unexpected happens, it's also a good idea to examine your home and auto insurance policies. With the help of a State Farm® Personal Price Plan®, you'll be matched with a personalized option just for you, so you're always prepared for whatever life throws your way.

Sure, once you're married you might want to adopt a "what's yours is mine" approach to money. But while joint accounts may be easier to manage, combining finances is not necessarily for everyone. It's totally normal to choose to have a joint checking account for larger expenses, while maintaining separate accounts for everything else, or to not merge accounts at all and either decide which costs each partner is responsible for, or trade off each month. Just be sure to keep the lines of communication open when it comes to spending vs. saving to make sure you're on the same page.

One way to make sure that happens is to agree upon a certain amount each partner can spend without having to run it by the other. For example, "Maybe you're generally on the same wavelength when it comes to spending, so there's no need to run an expense by each other that is below $500," says Ma. "That said, for anything over $500, you should check with your partner before moving forward." That way, each partner feels like they have some financial autonomy within the relationship, while still respecting your joint money goals and values as a couple.

No matter how far along you are in your careers, it's a good idea for newlyweds to begin thinking about retirement goals. The first step is to share how you each envision spending those "golden years"—maybe one of you wants to retire ASAP, while the other is happy to keep working, or maybe you'll want to relocate—then decide what works for your relationship. The sooner you're aware of each other's separate and joint goals, the more time you have to work toward them.

Since you may each have your own retirement accounts, you can choose to manage them separately, though it's a good idea to share how much you're contributing and any match your employers may offer. Or you might want to take a joint account approach, where "you'd think of your total net income as one pot of money and both of your retirement accounts as one larger fund," says Ma. (Remember to update your beneficiaries on all of your retirement and other investment accounts!) Either way, it's all about the two of you developing a similar money mindset moving forward, says Ma. "Determine what you value as a couple, what financial goals you want to achieve, and make sure how you spend your money is aligned with those values and goals."

No matter what your priorities may look like, State Farm® has a Personal Price Plan® customized to suit your financial future, at an affordable price just for you. Learn more about how you can start saving smarter, together, at statefarm.com®.

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