Learning to Launch: Tackling Marriage and Finances

March 21, 2023
  • Private Banking
You’ve decided to join together in holy matrimony, but does that include joining your finances? BBH’s Next Gen newsletter The Fresh Take takes a closer look.

Your partner just popped the question, and you are beyond thrilled to finally be engaged! You are in the midst of celebration and pure joy. Then, suddenly the swirling cloud of questions begins to creep in.

“When is the right time to create a joint bank account?”
“What are our wedding day priorities?”
“How do we set up our finances for the future?”

Although these questions seem daunting, they play an important role in planning your wedding day and your life together thereafter. Money- related conflicts are frequently cited as the top thing couples argue about, so getting on the same page early is important.

So, when is the right time to combine our finances?

When it comes to combining finances, you have several options. Some couples combine their finances before getting engaged, some wait until a few years into a marriage, and others never combine at all. The most important thing is to talk about your finances openly so both parties have a clear understanding of their shared financial picture. This includes debt, loans, savings, credit cards, and so forth.

Every couple has a different timeline and financial priorities, and there is not a "one-fits-all" method. Here are some common options couples can use to manage shared expenses leading up to a wedding and beyond:

  • Proportional: Each partner contributes to household finances proportional to their income. If partner A makes $2,000 a month, and partner B makes $4,000 a month, that is 33% and 66% of the household income, respectively. You would then share responsibility of expenses following that percentage of contribution.
  • Equivalent: Each partner contributes the same amount to expense regardless of contribution to household income.
  • Complete Combine: The partners create a joint bank account with a shared access to debit and credit cards for the account. Each partner would be contributing to this account and have access to withdraw.
    • If you decide to go this route, it is important to note that both parties can claim full ownership over the entirety of the account. In the eyes of the law, the full amount belongs to both of you.

Okay, but the bride (or her family) pays for the whole wedding, right?

Sorry, no! Long gone are the traditional values of having the bride’s family pay for the entire wedding. Wedding costs can be split among families or handled by the couple alone.

Your budget conversations should begin at the same time as venue, date, and guest list discussions. Enlisting the help of a trained professional, a wedding planner, who has seen a variety of wedding styles can help lay the framework and help you decide how to pay for it -- but remember, you’ll have to pay for this service as well!

There are several types of wedding planners who can offer different services based on your needs.

  • Full-Time Planner: Set sessions and full blueprint with guidance the entire time
  • Part-Time Planner: Booked sessions, less intensive, more do it yourself (DIY)
  • Destination Wedding Planner: Expertise in weddings abroad
  • Day-Of Coordinator: Most full/part time planners will offer this, but it is also possible to just have someone day of to execute on the schedule. Some wedding venues offer their own, or you can find someone externally.

When it comes to the other costs, such as food, DJ, band, photographer, videographer, transportation, and hotels, you should be sure you understand who is responsible for each cost. Keeping track of your expenses in an excel spreadsheet can be a valuable way to track who is paying for what and when the payments are due to the vendor.

Setting Up Finances for the Future, Post-Wedding

While it is appropriate to manage paying for your wedding together, you must also consider preparing for your future after the wedding is over! Some of the larger expenses and considerations you should consider discussing include the honeymoon, planning a down payment on a house, and setting up funds for future children, if desired.

For your honeymoon, it has become more common to ask guests to contribute to your honeymoon fund as an engagement or bridal shower gift. There are registry websites to help set this up for you. It is important to discuss what kind of trip you would like to do for your honeymoon, so you can begin to plan around the desired travel budget.

If you plan to purchase a home soon after you wed, it is critical to start researching the neighborhood you would like to live in and establish a reasonable budget between you and your partner. Be sure to factor in mortgage rates, closing and carrying costs, and other financial decisions that come along with home ownership.

If you are interested in having children, research savings plans, daycare and tuition costs, healthcare coverage, and other child-related money matters before your children arrive! (Our next edition of the Fresh Take will dive deeper into the costs of raising children today.)

At the end of the day, the enjoyment of your wedding planning and your wedding may hinge on how well you plan – not only for the big day, but your life afterward. It is important to touch base with yourself, and with your fiancé, to fully and transparently understand the new financial life you are going to undertake together.

Reach out to your BBH relationship manager for any help discussing your finances or for tips on how to have these important conversations with your significant other (or your parents!).

Brown Brothers Harriman & Co. (“BBH”) may be used as a generic term to reference the company as a whole and/or its various subsidiaries generally.  This material and any products or services may be issued or provided in multiple jurisdictions by duly authorized and regulated subsidiaries.  This material may not be reproduced, copied or transmitted, or any of the content disclosed to third parties, without the permission of BBH.  All trademarks and service marks included are the property of BBH or their respective owners. © Brown Brothers Harriman & Co. 2023.  All rights reserved. PB-06183-2023-03-03

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