Finance
How to navigate financial conversations with your partner as newlyweds
FOX Business’ Lauren Simonetti took to the streets of New York City to get people’s take on the recent Bankrate survey that revealed 40% of Americans who are married or living with a partner commit ‘financial infidelity.’
After the wedding and honeymoon bliss wears off, it’s time to get back to reality.
Money is a topic that requires discussion between you and your partner, hopefully before nuptials take place. Finances can be a huge point of contention between couples, so it’s important to establish a plan early on about how you both, as a married couple, are going to deal with money.
Money is also often an awkward topic between partners, but it’s vital to be honest with each other through financial conversations. After all, 44% of couples argue at least occasionally about money, according to Bankrate.
Below are tips to follow as newlyweds to help you navigate through the sticky situation of finances.
Discussing finances is a difficult, but important conversation to have with your spouse. ( / iStock)
WHEN SHOULD I START SAVING FOR MY WEDDING?
- Put the discussion of money out there
- Determine your long-term and short-term financial goals
- Figure out how you are going to save as a couple
- Create a budget
- Adjust finances when necessary
1. Put the discussion of money out there
When you sit down with your partner to talk about finances, put it all out there. Be 100% honest with each other, so there aren’t any surprises down the line.
One important topic is debt. This includes everything from personal loans, credit card debt and student loans. Figure out how much you both have and come up with a plan on how you will pay it off.
Also, talk about your spending and saving habits. What do you spend a lot of money on? Do you consider yourself a spender or a saver? How much money have you already saved? Do you have a retirement plan in place?
2. Determine your long-term and short-term financial goals
Establish the goals that you have together, short- and long-term.
If you have outstanding debt, one goal is probably going to be to get that paid off as soon as possible. Maybe you want to save for a down payment for a house. Do you have an emergency fund set up yet? If not, maybe one of your first goals is to get that funded.
You can also talk about short-term money goals. This includes things like saving for a vacation or maybe a new vehicle.
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When talking about finances with your spouse, be open and transparent about things like debt and your own personal spending habits. ( / iStock)
3. Figure out how you are going to save as a couple
There are three different ways you can handle finances together. The first is doing everything jointly. The second is keeping your finances completely separate and the third is a combination of both.
Today, 43% of U.S. couples who are married, in a civil partnership or live together have only joint accounts, according to Bankrate.
Thirty-four percent of couples have a mix of joint and separate accounts, according to the source, and 23% have completely separate accounts.
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The stats do show that keeping money separate as a couple is an idea posed by younger generations, with 69% of millennials keeping separate accounts, according to Bankrate.
How you and your spouse plan to handle your finances is a personal decision. Some, like Dave Ramsey, for example, believe that when a couple is married, their money should get married too, and all income should go into the same pot.
Others would rather keep things separate, although this does pose difficulty when bills and children come into play.
Certain couples find value in a combination of both ideas.
For most couples, individuals won’t have the same debts and income, which can quickly create financial imbalance and hostility towards one another.
That is why it’s so important to talk through all of these options with your partner, and determine what is best for you during the stage of your life that you’re in. Remember, you aren’t stuck to one way of doing things forever. If the method you choose isn’t working, you can always change things.
That said, lumping everything together still remains the most popular option.
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4. Create a budget
Creating a budget is a great way to keep you on track with your goals and see spending habits clearly.
Whether you’ve made a budget before or not, creating one with your partner for the first time is a new experience. Even if you’ve made one as a single individual for years, it’s going to look different now that you’re married.
When creating a budget, key things to consider are your combined income, expenses and saving plans.
Revisit your budget monthly to make sure you are on track with your goals and to make any necessary adjustments. ( / iStock)
Once you know your combined income, list out all of your expenses, including bills as well as debts that you need to pay.
Then, don’t forget to also include how much you want to save from month to month. A popular budgeting method for couples and individuals is the 50/30/20 rule, where 50% of money goes toward needs, 30% toward wants and 20% to savings.
5. Adjust finances when necessary
An initial money conversation is great, but it should not be the only one you have. Check in with each other on a monthly or bimonthly basis to ensure changes are made and points are heard.
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Make any adjustments you need to make in order to maintain a healthy relationship with your significant other and your finances.
The Federal Reserve held interest rates steady at its Wednesday meeting and did not disclose a timeline for when it will lower them. (iStock)
The Federal Reserve is keeping rates steady at its targeted range of 4% to 4.25% and is waiting to see how President Donald Trump’s administration’s tariffs will impact the economy.
For now, Federal Reserve Chair Jerome Powell said that the central bank is in the right place to monitor the impact tariffs will have on the economy before making a decision on further interest rate cuts. For now, the mandate remains the same: get inflation to a 2% target rate. The decision comes even with a negative first-quarter GDP reading. US GDP decreased at an annual rate of 0.3%. This was the first quarter of negative GDP growth since the first quarter of 2022.
“While gross domestic product recorded a mild decline in the first quarter, prompting concerns about a recession, broader economic data underscore ongoing resilience,” the National Apartment Association’s new Vice President of Research, George Ratiu, said in a statement. “The main risk to economic activity is continuing financial pressure on households coming from higher monthly bills, combined with the looming threat of rising layoffs.”
The Fed had anticipated two interest rate cuts for this year, but the impact of how President Trump’s tariffs will play out has derailed this plan. Powell said that the Fed is in a good place to think out policy rates to respond promptly and to potential developments, including rate cuts or holding them steady.
“Despite heightened uncertainty, the economy is still in a solid position,” Powell said at a press conference on Wednesday. “The unemployment rate remains low, and the labor market is at or near maximum employment. Inflation has come down a great deal but has been running somewhat above our 2% longer-run objective.”
If you are struggling with high inflation, consider taking out a personal loan to pay down debt at a lower interest rate, reducing your monthly payments. Visit Credible to find your personalized interest rate without affecting your credit score.
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Mortgage rates won’t budge in time for summer home buying
With no rate cut in sight, housing affordability will remain a central challenge for most Americans, whether they are looking to buy or rent, according to Raitu.
Mortgage rates are likely to remain in the high 6% range they’ve held for the last six months without action from the Fed. Home prices are roughly 50% higher than they were in 2019. That means that with current mortgage rates, buyers are facing a $2,200 monthly payment on a median-priced home.
”The best-case scenario for mortgage rates is to hover just above the 6% mark for the next two years,” said Victor Kuznetsov, Imperial Fund Asset Management co-founder and managing director. “The average American household has adopted a wait-and-see strategy regarding mortgage rates, as they also seek to reduce their monthly consumer spending amid current economic uncertainty.
“The good news is that employment and home prices remain strong, so families will be in a better position to buy or refinance a home in the coming months, especially if rates dip below 6%,” Kuznetsov continued.
Mortgage rates are expected to remain flat through the summer housing market. The Mortgage Bankers Association forecasts that the Fed will resume cutting short-term rates in the year’s second half. “Heading into the Fall, if inflation cools as expected, mortgage rates will begin to dip slowly and steadily, finishing out 2025 around 6%,” Voxtur CEO Ryan Marshall said.
If you want to become a homeowner, you can find the best mortgage rates by shopping around. Visit Credible to compare your options without affecting your credit score.
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Lending picks up despite higher rates
Some buyers aren’t waiting for interest rates to drop, and lending has picked up recently as consumers readjust their outlook and expectations, according to Michele Raneri, TransUnion vice president and head of U.S. research and consulting.
“While the possibility still exists for potential rate cuts later this year, the economic picture is complicated, and it’s too early to know if or when those cuts might happen,” Raneri said. “We’re starting to see some positive signs in lending – mortgages, home equity loans and auto financing are showing signs of life after a slow couple of years.
“However, these gains will likely remain incremental until rates begin ticking down, as many borrowers are reluctant to take on a loan at today’s rates, particularly if they currently have a loan at a significantly lower rate,” Raneri continued.
If you’re worried about the state of the economy, you could consider paying down high-interest debt with a personal loan at a lower interest rate. Visit Credible to speak with a personal loan expert and get your questions answered.
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Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.
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