Three Money Moves To Make Before Marriage

Frank Sinatra told us that love and marriage go together like a horse and carriage.

Well, you can certainly have a horse without a carriage. In fact, that horse might very well be much happier without dragging around a heavy carriage.

Indeed, you can also have love without marriage. And that relationship might very well be much better off without the cumbersome burden of what boils down to a legal contract.

The idea of marriage being a partnership of equals that is predicated on love, division of labor, companionship, and mutual sexual attraction is a modern invention. It’s an ideal that has no historical basis.

Marriage for the vast majority of human history has been far more transactional in nature, with clear-cut objectives relating to arranging family alliances and creating economic liaisons for upward mobility and species survival. It was about biology and evolution.

Now, I’m not necessarily anti-marriage. Not at all.

But I do agree with Kevin O’Leary’s marriage views, in the sense that there’s really no need to get married unless you’re having children. Even then, marriage isn’t totally necessary.

Marriage is not a prerequisite for, nor a guarantee of, a successful long-term relationship with someone.

That said, I fully understand that marriage is a very important goal and symbol for many people all over the world. Be it for religious, cultural, or various personal reasons, marriage is an aspirational measure of success and a major life milestone for most people.

It’s with that in mind that I decided to write this article.

If you plan on getting married at some point, it’s absolutely critical that you take the financial aspect of your relationship very seriously.

Achieving financial independence is something that takes a lot of hard work and planning. As I’ve laid out in The Dividend Mantra Way and 5 Steps To Retire In 5 Years, financial freedom is something attainable for just about anyone out there.

But you don’t want to reach the mountaintop, only to find that your partner might end up dragging you back down the mountainside.

As O’Leary puts it, getting married is akin to going in business with someone. It’s an investment. There’s a legal bond at work here. Just as you’d never blindly buy a stock or a business, you shouldn’t blindly get married. Due diligence and intelligent planning are vital.

Here are two facts.

Money is one of the biggest reasons people get married.

Money is one of the biggest reasons people get divorced.

I could state this more eloquently, but I won’t.

Simply put, money is at the center of all of our lives. It impacts just about everything we do. And it’ll have a major say in how successful your marriage ends up being – regardless of how lovey-dovey you might feel about each other at the outset.

As such, you have to approach the finances of your pending nuptials correctly so that you set yourselves up for success over the long run.

Here are three money moves you should make before getting married:

Disclose All Finances

This is the first step.

Both people in the relationship should fully disclose all finances.

It cannot be overstated how important this is.

Full disclosure sets the foundation in place for an honest and successful relationship going forward, and it also sets the stage for everything else I’m going to discuss.

A healthy relationship is always built on trust, honesty, communication, and mutual respect.

Putting your cards on the table and showing each other everything cements all of that right off the bat.

If you can’t be honest with one another about everything –  especially money – at the start of the relationship, when everything is rosy, the odds of this improving later on are very low.

And if one person can’t put their cards on the table, it probably raises some important questions as to why that might be. I’d rather find out that my partner is trying to hide things before marriage, not after.

Full disclosure means opening up the books.

Assets and liabilities should be shared to the degree that it makes sense. And both of your ongoing budgets should also be shared.

This is incredibly useful for many reasons.

You can learn a lot about someone by looking at their money.

Someone who’s highly responsible, for instance, is probably gonna have their finances in order. I’m not saying you should expect riches. But they’ll at least have a good idea of what they’ve got and where it’s all going. And someone who’s forthright probably won’t have a problem sharing that with their potential spouse.

Conversely, if someone begrudgingly opens up about their massive debt load, I’d start to question their character as it relates to responsibility, communication, and trust.

By the way, this isn’t something that’s only predicated on marriage. I’ve insisted on mutual financial disclosure with every long-term partner I’ve ever had.

Make A Plan

Once all finances have been disclosed, you should start to build a plan together.

This plan will relate to finances, sure. But it’ll relate to everything else in life, too. Of course, as noted earlier, money touches everything in our lives, so this plan will largely revolve around your finances.

This plan should be the blueprint for your entire marriage moving forward.

After all, a marriage is the same as any relationship in the sense that you’re a team. You’re building a life and legacy together. It’s up to you what that life will look like, but this should all be planned before getting married.

Budgeting, kids, the city you’ll live in, career/entrepreneurship plans, family arrangements, preferred housing type, schedules, goals, dreams, hobbies, investments, philanthropy, etc.

All of this should be openly communicated and laid out before you ever walk down the aisle together. By openly communicated, I mean using your words to vocalize what’s on your mind. Your partner isn’t a mind reader.

No, you don’t have to have your entire life mapped out exactly. Yes, you should be able to do some adulting and roughly sketch out what your life together will look like.

Now, the plan doesn’t have to be this unwavering road map etched into stone. It can and should be flexible.

But if you want four kids and she wants zero, this is something you need to hash out before ever walking down the aisle. Likewise, if you’re a saver/investor who’s marrying someone who loves to spend all they’ve got (and then some), you could have a big problem on your hands.

I can’t tell you how many couples (married and otherwise) I’ve met over the years who are clearly not on the same page. This is because they’d rather discuss what kind of takeout to get or which movie to stream, instead of growing up and having the tough talks.

Two people won’t completely agree on every single issue. That’s unrealistic. But the only way to know what you agree and disagree on – and where compromises need to be made –  is by communicating and putting the plan together in the first place.

Then you’ll be able to make those compromises together, as a team.

Again, this doesn’t apply only to marriage. If you see yourself staying with someone for the long haul, it makes sense to start building that plan together as soon as possible.

Get A Prenup

This is a must.

I actually can’t believe that anyone would get married without a prenuptial agreement. In my mind, it should practically be required.

Once you have the finances fully disclosed and the plan laid out, a prenuptial agreement simply puts much of that in writing. That’s it, really.

Marriage is a legal contract. So is a prenup.

It’s funny to me that people get fussy over a prenuptial agreement because of the contractual nature of it, yet they have no problems with getting the legal system involved via a marriage. One contract is okay, but the other isn’t. Hmm. Doesn’t make sense to me.

A prenuptial agreement puts into writing whatever terms were mutually agreed upon before the nuptials.

That way, there’s no “fogginess” later on about who said what. It’s there to revisit at any point.

Furthermore, it protects both parties against any unforeseen issues later on that could cause a split of the partnership.

Most reasonable people would agree that your premarital assets shouldn’t be split up in case you get divorced. If you built an empire for yourself that had nothing to do with your current partner, getting divorced from them shouldn’t mean they’re suddenly entitled to some of that.

A prenup ensures that this is all protected. Otherwise, you’re putting yourself in an unnecessarily precarious position, depending on the exact circumstances of your marriage, finances, and divorce. The US court system can be brutal if you allow them to decide who gets what. I think way too many men in America have found this out the hard way.

Even a lot of married personal finance bloggers out there publishing their portfolios and/or net worth numbers could potentially find those numbers cut in half – or worse – if they were to get divorced. Meanwhile, my FIRE Fund was built through my efforts and money alone. Nobody can lay claim to any of it. I sleep very well at night.

While divorce may seem like an unlikely scenario while everything is still fresh and fun, somewhere between 40% and 50% of married couples in the US divorce (with ~70% of divorces initiated by the wife). You’re about as likely to divorce as not.

And that’s after getting to the marriage stage. The truth is, most romantic relationships that we’ll ever have in our lives eventually fail. It’s not a surprise. People are fickle creatures who are constantly growing and changing. Sometimes this growth doesn’t occur in the same direction, and/or at the same speed, as someone else’s growth.

I think these money moves will help put the odds in your favor, all else equal, but even the best-laid plans can go awry. That’s why a prenup is the ultimate marriage backstop.

One argument against a prenup is that it’s “unromantic”.

Well, here’s a newsflash for you.

A marriage isn’t all roses and rainbows. It’s not one, long, never-ending romance.

It’s life. There are ups and downs, folks. You’ll have amazing nights together, sure. But you’ll also have bad days.

You want to marry someone who’s going to take care of you when you’re so sick you can barely walk. You want someone who’s going to be there for both the ups and the downs.

Likewise, you want to marry someone who’s willing and responsible enough to fully disclose finances, put a plan together, and agree to everything in writing. You want a grown-up.

For me, coming into almost any relationship as the more financially well-off partner, it’s awfully romantic to know that my significant other would be marrying me for how she feels about the entire package I bring to the table, not for a potential financial gain at my expense. The warm and fuzzy feelings I get from that knowledge beats out any candlelight dinner. I would enter that legal partnership far more confident and happy, which would reverberate throughout the marriage.

It’s not “unromantic” to make sure both parties are committing to marriage for the right reasons.

What better proof than agreeing to that beforehand?

All that said, a prenup should be one that’s reasonably fair and one that both parties are comfortable with.

For this last step, it’s imperative that lawyers are consulted.

Conclusion

Marriage can be a wonderful component of life. I wouldn’t say it’s wholly necessary in many cases. But marriage can add tremendous value, boosting one’s quality of life far beyond whatever they could achieve by themselves.

However, marriage could also prove to be a total nightmare.

As with anything else in life, the degree of success you achieve with it will largely depend on how you approach it. You tend to get out what you put in.

In my view, following these three aforementioned steps will almost certainly lead to a more fruitful marriage. 

If you decide to marry without disclosing finances, putting a plan in place, and signing a prenup, I think you’re making an unwise choice and setting yourself up for a more difficult marriage and life moving forward.

At the very least, the steps I’m putting forth can do no harm. It’s not like anyone ever came out worse off because they put a plan in place or protected their assets. Do a cost-benefit analysis on what I’m proposing to see what I mean.

The downside is practically zero. But the upside to following these steps is immense.

So disclose those finances, make a plan, and get that prenup signed.

Then get busy enjoying the rest of your lives together!

What do you think? Ever been married? Plan to get married? Do you think these three steps will lead to a more fruitful marriage? 

Thanks for reading.

P.S. If you’re ready to put yourself in excellent financial condition, which could lead to a healthier marriage, check out some fantastic tools and services I used on my way to becoming financially free at 33!