Money and Marriage: Like a Horse and Carriage

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June is the traditional “wedding season” and many newlyweds are dreaming of a happy life together. Agreement over finances and paying off debt are important preparations for a long-lasting union.

According to the study, “Bank On It: Thrifty Couples are the Happiest,” conflict about money predicts divorce better than any other type of disagreement. Couples who disagree about finances once a week were more than 30% more likely to divorce over time than couples who only disagree about finances a few times per month.

The study says that perception about how well one’s spouse handles money is also a factor in shaping family life. If an individual feels the spouse spends money foolishly, he or she reports lower levels of marital happiness. That also increases the likelihood of divorce 45% for both men and women. Only alcohol/drug abuse and extramarital affairs were stronger predictors of divorce.

Editor’s Note: Take a look at this story we did to see what a credit counselor had to say about money and divorce:

“Conflicts over money and the burdens of debt put a heavy strain on marriage and can spread into other issues. It can erode your relationship and even causes the marriage to collapse,” says Bill Hardekopf, CEO of and author of The Credit Card Guidebook. “Committing to a family budget and savings plan is making a commitment to your marriage.”

Before you get married, know how your future spouse will treat money. Don’t assume that your spouse shares your beliefs about money. Even if your future spouse is kind and respectful to you, he or she may treat money differently.

The spending and saving habits may surprise you. A free spender before marriage will probably be a free spender after marriage.

To avoid surprises, have an honest discussion about money before the wedding day. This talk may be difficult, but it is necessary before joining life and finances. If one partner has large debt or difficulties managing money, address these issues before the marriage. Debt can not only affect your financial future, it can also severely damage your credit score.

Here are some financial tips for newlyweds:

  • Before the wedding, show all of your cards. Be honest about your income, debts and money problems. Bring out your bank statements from the past 12 months to show what you did with your money. Explain how your parents raised you to handle money and your strengths and weaknesses with money. Admit if you are a spender or a saver.
  • Each of you should get a copy of your credit reports from the three credit bureaus. This will give you a clear picture of credit accounts, debts, and how creditors will judge you. Aim to get your scores over 750 to receive the lowest interest rates for your first mortgage and other loans.
  • Have a wedding that you can afford. Do not start a life together by using a credit card to pay for a wedding that is out of your budget.
  • Avoid credit card debt. The best rule of thumb is simply, “if you can’t pay for something with cash, you can’t afford it.”
  • Get one or two credit cards and stick with them. Use them for several purchases each month and pay them off immediately. Building a long-term payment history with one or two credit cards is an important factor in your credit score.
  • Each spouse should have a credit card in his or her own name to build an individual credit score.
  • If you have a credit card balance, pay as much as you can over the minimum each month. If you receive gift money, a bonus, a second job or a tax refund, use this to pay off your debt. The faster you pay it off, the quicker you can focus on saving and getting ahead. You can even make micro-payments multiple times during the month to pay off your balance faster. Eat a meal at home and immediately apply the money you saved to your credit card balance.
  • Before the first bills come in, make a plan for paying them and who will pay them. If you have separate accounts, know which account pays each bill.
  • Reduce your debt-to-credit limit ratio. This will help improve your credit score. Your monthly debt, including your mortgage, should not exceed 35% of your gross income.
  • Differentiate between your wants and your needs. Then simplify your wants.

“It is easy to get caught in the trap of wanting more than what you have, keeping up with the Joneses, and looking to ‘stuff’ for happiness. But this will put you on the fast track to increasing your debt,” says Hardekopf.

“Savings and assets help build financial security and increase the odds of a strong, happy marriage that lasts.”

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