The Brooklyn FI Guide to Getting Married
By AJ Ayers, CFP®, EA
It probably isn’t fair to call this the “Brooklyn FI” guide since this is mostly my (AJ’s) opinions. But as the only Brooklyn FI staff member who is currently married, I feel qualified to speak on the firm’s behalf.
First of all, let’s talk about the institution of marriage, the centuries-old tradition of legally binding one human to another. Marriage has been, and perhaps always will be, rooted in a financial transaction. Most of today’s marriages are more about love than gaining farmland but we can’t ignore the historical financial aspects of the institution. As a financial planner, I thought about money every step of the way of my relationship with my now-husband. And I say that as a positive thing! I’m not saying you have to talk about money every single day with your partner, but I promise that the core of your relationship will be stronger if you TALK about money, even just a little bit, before you start selecting a venue for the wedding.
Money is EMOTIONAL, there’s no way around that. We all have different relationships to it that are rooted in how we grew up. Some of us never had to worry about money, some of us have had to financially support family members, some of us grew up with barely enough money for food, some of us have experienced insurmountable debt from student loans or medical expenses. We all have skeletons in our financial closets. If there’s one piece of advice you take away from this practical (and let’s be honest, flip and cheeky) guide let it be this: be honest and open about money with your partner.
1. When should my partner and I start talking about money?
I used to open my Tinder responses with “How much is in your 401(k)?” I mean not really, but I wanted to. In an interview, actress Tiffany Haddish joked about checking a dude’s credit score before she went on a date with him. Not no!
Whatever you and your partner need to do to avoid any financial weirdness you need to do NOW. Not next year, not when you’re engaged, and definitely not after you’re married. Just talk! Be open and honest about your debt, your philosophy around money, and your expectations for each other. It’s often the case that one spouse will make more than the other just based on their chosen career and BOTH spouses need to be comfortable with that. Keep in mind that your incomes will change! During the course of your relationship, it’s likely that one of you will go back to school, take time off to raise a baby, get laid off, take medical leave, take time off to care for a sick family member, change careers, get promoted, or start a business. Which is all to say, if you have transparent discussions around money, a sudden change in income won’t end up in a money fight. Support each other! It’s not just about who is paying more of the rent or mortgage.
Being a financial planner can sometimes (read: always) feel like being a marriage counselor, especially when couples are sharing their account balances and debt for the first time!
This is not a fun conversation but I promise you’ll feel so much better after you have it. When there’s a case where one partner makes significantly less income or has significantly fewer assets, they can feel small and ashamed. There’s NOTHING to be ashamed about but I promise that if those feelings of shame, inadequacy, fear, etc. stay hidden…they will come out later.
2. Why even get married? Will it save me money on taxes?
We get this question a lot: will getting married save me money on taxes? The answer depends on each unique situation. Generally, if one partner makes significantly more than the other partner, getting married could lower the amount of taxes the couple will have to pay as a whole. Sometimes when each spouse makes about the same mid-six-figure salary, the amount of tax actually increases.
Another question I get a lot: once we get married, should we file joint or separate? It really depends! For MOST people, filing jointly will result in a smaller tax bill. The basic reason behind that is the DOUBLING of the standard deduction and the widening of the tax brackets for married people. In plain terms: more of your income COULD be taxed at a lower rate if you get married and file jointly which is why most married people file jointly. Here are some of the credits and advantages you LOSE when you file separately: the child and dependent care credit, the Earned Income Credit, the deduction for student loan interest, education and tuition credits, Roth IRA contributions. That said, it can make to file separately if one spouse has significant medical expenses (more than 10% of the income for the year) or other itemized deductions…but it’s very rare.
3. What if I just don’t want to get married or have a good reason not to marry the love of my life?
Awesome. I mean aside from the tax reasons mentioned above and perhaps health insurance, there’s nothing that great about it. One thing to keep in mind is the privileges a spouse has if one of you were to get sick. If you’re not going to get married, make sure you consult with an estate planning attorney to make sure your partner is protected in case tragedy strikes. Also, explore a healthcare proxy and other medical forms that will allow your partner into the hospital room even if they aren’t your spouse.
4. How much should I spend on an engagement ring?
Oh man, who put this question in here? I’m not sure I’m comfortable giving my opinion here but let’s just start with debunking the myth that you should spend three months of salary on a ring or whatever propaganda DeBeers came up with. Don’t go into debt for an engagement ring, that’s a recipe for resentment. Be realistic with your partner. Talk about it! Maybe a gold plated band with a cubic zirconia stone is what you can afford right now. Maybe you’ve got your grandmother’s whopper diamond from the 1940s.
Set expectations! My opinion: the engagement ring should not cost more than 1/3rd of the value in your retirement accounts. And for the love of God, PLEASE add the ring to your renter’s or homeowners insurance policy. If that thing slips into a subway grate, someone is going to be very unhappy.
Fact: Diamonds are overpriced and harmful to the environments and the communities where they are mined
Fact: Diamonds are pretty and are a momentous celebration of a person’s love and commitment
The above statements are both true. We have a paradox.
5. Do I need a prenup?
Probably! And the time to do it is NOW. A prenup or “Prenuptual Agreement” is a legal document that provides an exit plan should things not work out. A prenup is not a signal that you have doubts about this marriage not working out, it’s essential and intelligent planning by two people who love each other who don’t want to cause each other emotional or financial harm.
Each state has different laws so be sure to consult with an attorney. Like many legal documents, you get what you pay for. A solid prenuptial agreement will set you back a few thousand dollars and usually involves each spouse hiring their own lawyer to make sure they are represented appropriately. You can try out a millennial-friendly solution like HelloPrenup to get you started. My opinion: this is money VERY well spent. Not just in terms of avoiding a costly and messy divorce but in terms of the “when should my partner and I start talking about money?” thing. HelloPrenup takes you through a series of questions to frame your money conversation before you become legally married.
6. How much should I spend on the wedding?
Oh boy. I’m about to get in a lot of trouble here because everyone is going to have an opinion. Mine is this: don’t go into any kind of debt to pay for a wedding. It’s not that it’s “not worth it,” it’s that when a wedding puts financial pressure on your relationship, there’s an immense amount of pressure that gets put on the actual wedding and it just leads to bad bad news.
How much did I spend on my wedding? I spent about $40,000 on a wedding that by most accounts was absolutely fabulous. The New York Times was there to tell you all about it. Was that too much? Too little? I don’t know. My husband and I are so lucky to surrounded by so many creative and generous people so we saved thousands of dollars on traditional big-ticket items. My mother is an incredibly talented artist so our invitations were her gift to us (they were fucking gorgeous!). My friend Steph is a floral designer so we spent the day before the wedding browsing the Los Angeles Flower Mart for buds and she spent hours and hours in her Airbnb making the table arrangements and my bouquet. We skipped the whole cake thing because it just felt unnecessary and we were more interested in drinking and dancing!
Decide on what’s MOST important to you. Oh, and also every single one of your relatives.
A lot of people have pressure from family (both sides) to have a big wedding in a city that’s close to relatives. There’s no right or wrong way to have a wedding and for many families, it’s about so much more than the couple. TALK to your families (both of them!) about what’s important, you may be surprised by the outcome. If it the deepest most important desire of your mother to throw you a Big Fat Greek Wedding, let her! You’ll have fun. I’ve seen weddings end many a friendship and in some cases cause irreparable rifts between mothers and sons, mothers and daughters, sisters, and best friends. The best way to avoid that: TALK ABOUT THE BUDGET FIRST AND MAKE SURE EVERY SINGLE PERSON INVOLVED IS ON THE SAME PAGE.
Some practical tips
The best way to save money is to do everything a la carte but it’s going to take some heavy lifting and creativity. Often wedding venues will provide the food, alcohol, music, chairs, silverware, etc. but at a hefty premium. All-inclusive is awesome and stress-free but it will cost more than negotiating with individual vendors. Find an expensive venue like a public park or a generous family member’s back yard and bring in your own booze and food from your favorite restaurant.
It always costs more than you think. So add at least 20% to what you think it’s going to cost.
It’s okay to not invite everyone. This is such a tough one because feelings will get hurt but at the end of the day, a 75 person wedding is going to cost significantly less than a 200 person wedding. It’s just a reality. Seriously, the best way to have your DREAM wedding and stick to a budget is to cut your guest list in half.
Decide what’s most important to you and cut back on what isn’t. The key elements to a wedding: alcohol, food, cake, dancing area, music, location, flowers, table settings/dining situation, photographer, and whatever else I’m forgetting. Pick 2-3 of those to really splurge on and then fill in the rest. If all are important and you simply can’t choose, then get married in secret now and throw yourselves a huge party in 5-10 years when you’ve got $200,000 to spare. Seriously.
7. Should we merge finances?
Generally speaking: probably not. It’s not 1960 anymore, women can have their own credit cards without a male relative co-signing for them. With Venmo and online banks, spouses can split expenses easily and painlessly. So many clients ask about the pros and cons of merging bank accounts or keeping things separate. My advice: do whatever is EASIEST and will create the least friction. For some couples that means depositing their paychecks into a joint account and paying all shared expenses out of that account.
Some couples prefer to keep everything separate and split costs like rent and groceries. That’s cool too. My husband and I are both business owners so it didn’t really make sense for us to merge finances and have shared accounts.
Some practical tips
Retirement accounts like IRAs and 401(k)s are always individual. These accounts are attached to your social security number so you’ll each need to have your own IRA and 401(k).
If you’re going to keep things separate I generally recommend a shared savings account with a specific and awesome goal that you each contribute to. My husband and I set up an “apartment upgrade fund” for the money we received as gifts for our wedding. For you, it might be an annual vacation fund!
If you are going to keep things separate, automate and don’t overthink it. When Brooklyn FI was getting off the ground I was unable to contribute any income to our household expenses for a few months and I felt inadequate. I wanted to do things like go out to dinner but I didn’t want to suggest them because I knew I couldn’t pay for them. This was of course all in my head and was related to my own issues with money and my incredibly supportive and loving husband was more than happy to buy us dinner. What helped? I paid for the small things like buying the pizza slices on the way home from the bar.
If you’re going to split the rent or the mortgage, set up automatic withdrawals or transfers so it’s out of sight and out of mind. Nothing kills romance more than “Honey, it’s the 4th. Can you please Venmo me your share of the rent.”
A summary of points 1-4: do whatever you need to do to remove money friction from your daily discourse. Automation (meaning you set up automatic electronic transfers of x dollars from your account to a joint account on x date) can seriously save your marriage.
8. How much should I spend on my dress or tux?
Whatever you want! Seriously! It’s your day. Don’t rush and don’t stress.
Some practical tips
Do some solo shopping before involving your mom, dad, aunt, grandmother, best friend, dad, and everybody else. Once the madness starts you’ll lose sight of what you want. Steal an afternoon of online browsing or go in person without telling anyone. Sorry mom!
Watch at least four cheesy romantic comedies about weddings before going dress shopping. My personal faves: Bridesmaids, Bride Wars, Bachelorette, and 27 Dresses.
For a great-looking tuxedo that you know you’ll never wear again try The Black Tux. You can rent a great-fitting suit for not a lot of cash!
Do you love couture but don’t want to spend $20,000 on a gown? Go to a sample sale! Or even better, go to a perpetual stress-free sample sale at Glamour Closet (locations in NY, SF, Chicago, and LA). I wanted over-the-top princessy/old Hollywood glamour and the wedding dress trends in 2018 were all about mermaid skirts and long sleeves (a certain American had just married the backup heir to the throne of England and every dress was some version of hers) so I didn’t see many things I liked in the typical stores. I found an insanely gorgeous Carolina Herrera gown from a few seasons ago at Glamour Closet for about 1/4th of its retail price tag.
9. Should I change my name and how should I do it?
I changed my name when I got married but it’s not right for everyone.
Why did it do it? Honestly, because my husband’s last name is DOPE. It’s Ayers. I went from Ally Jane Grossan to Ally Jane Ayers. I loved my maiden name (what a gross word for it) but it caused me so many administrative headaches when folks would think Gross-AN was Gross-MAN. Anyways, it’s 100% your call. That was my personal reason for doing it.
I don’t pass judgments on anyone who chooses to change their name or not, it’s an incredibly personal decision and one you shouldn’t rush. Many people decide to change their name legally but keep their given last name professionally. Some couples decide to create a new last name for both spouses by melding their two names together. I think that’s pretty neat.
That said, the mechanics of changing your name are a bit messy, especially if you’ve got lots of bank and investment accounts.
Some practical tips
When you go to order your marriage license, get MANY copies. I mean like 4 copies. Depending on the state you get married in, these will cost between $10 and $30 a copy. It is SO WORTH IT! Many financial institutions will require you to mail an ORIGINAL copy of your marriage license and you won’t get it back (seriously, wtf Vanguard!).
I recommend a service like Miss Now Mrs or HitchSwitch to make it easier. You’ll spend about $50 for them to prepare the paperwork that needs to be sent to various institutions like the Social Security Administration and the DMV.
Don’t do it right away, especially if you’re honeymooning in a different country! Wait a while to get started on the process because you’ll actually need to send your passport away and it could be a few weeks before it comes back.
If you are in school or have professional licenses, don’t forget to contact your school and the various boards and regulators. Keep in mind, you may have to go in person to verify your identity.
If you’re completing any sort of IRA or 401(k) rollovers, do that FIRST before you change your name. The name and address must match exactly when you’re moving an account from one institution to another.
10. How do I actually get married, What changes when I get married and how quickly does it happen?
I’ll leave the romance and emotional expectations to your therapist but I will talk about the practical implications of marriage. Not much actually CHANGES when you get married. You have the option to file a joint tax return, the potential to get cheaper health insurance, and more but there isn’t a magic “YOU’RE MARRIED” on switch.
Generally, to get married you must obtain a marriage license from the state where you will be married and then on the day of the wedding an officiant will have you sign the license and then it will be mailed in and certified. If you get married abroad, check the rules of your state. My experience: we went to the Beverly Hills courthouse four days before our wedding to obtain the license and pay for the certified copies. We then took the blank form to the wedding and our rabbi (the officiant) signed the license along with two witnesses. The rabbi then mailed the form and our certified copies showed up a few weeks later.
You are considered married on the date of the ceremony and the day the officiant witnesses your signature on the marriage license. For tax purposes, if you get married on December 31st, 2020 at 11:59pm you will be considered married retroactively for the tax year 2020.
Some of the benefits you enjoy as a married person
Access to health insurance coverage via your spouse’s employer
Your spouse’s social security, medicare and disability benefits
Inheritance of your spouse’s estate (the default)
Financial support in the case of a divorce (complicated of course)