Photo of a woman and a man who have talked about their finances before getting married.

Getting married? Here are 6 money conversations you should have first

Planning to tie the knot? Take time to wrap up the details of your financial future, too. Discussing these 6 hot topics about your money and goals can help you build a happier life together.

1. Your attitudes toward money

Some people see savings accounts as security blankets; others see them as ways to pay for trips to Tahiti. If you and your significant other view money differently, make sure your financial plans respect both of your financial needs and preferences.

2. How you plan for the unexpected

What happens if life throws you a curveball? Only 39% of Americans could cover a $1,000 setback using their savings.1 You and your partner should have plans in place for things like:

  • One of you loses a job, or wants to go back to school.
  • One of you wants to leave a current job to spend more time with family.
  • One of you wants to take a job somewhere else.
  • One of you can’t work and earn an income due to a disabling illness or injury.

3. Your comfort level with debt

Have an honest discussion about the money you owe. “Marrying someone with excessive debt can have serious repercussions,” says financial professional Harry James of Lockton Financial Advisors based in Kansas City, Missouri.

James notes that a partner's credit issues may make it tougher to qualify for a mortgage or other loan. It can also prevent you from contributing enough to your savings and retirement accounts.

If debt is an issue, make it a priority to pay your bills, starting with the ones that charge the highest interest rate.

4. How you feel about combining bank accounts

Some couples merge their finances completely when they marry, while others prefer to keep them separate. If you plan to maintain your own accounts, consider the following approaches:

  • Open a joint checking account to cover shared costs, with each person depositing a fixed amount each month.
  • Split bill-paying responsibility based on each partner's income.

5. What you consider a realistic budget

Excessive spending can wreak financial and emotional havoc on a marriage. Avoid it by creating a monthly spending plan and updating it together regularly. A smart budget should:

  • help you save for retirement by paying yourself first,
  • include short- and long-term goals,
  • allocate funds for housing, transportation, debt repayment, and miscellaneous items in amounts that are agreeable to both of you, and
  • allow both of you some independent spending.

6. Your thoughts on estate planning

Now is the time to decide where and to whom your assets would go, should something happen to you or your partner.

  • Review the beneficiary designations of all your accounts, including 401(k) plans.
  • Create a will if you don't have one. If you do, update it.
  • Determine how much each of you depends on the other's income. Consider disability insurance to help protect your income from a disabling illness or injury and life insurance to help replace that amount when you die.
  • If one or both of you own a business, put plans in place to protect what you’ve built.

Money discussions aren’t always easy. But they’re an important part of building a future, together.

Next steps:

1 Bankrate’s Financial Security Index, 2018

Disability and life insurance have limitations and exclusions. For cost and coverage details, contact your Principal representative.

Insurance from Principal® is issued by Principal National Life Insurance Company (except in NY) and Principal Life Insurance Company, Des Moines, IA 50392.

Reference of checklist is not an exhaustive list of what you should do. It and this communication are provided as education only with the understanding that Principal® is not rendering legal, accounting, investment advice, or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, investment, or accounting obligations and requirements.