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Treat your marriage like a business

Since marital status is so powerfully associated with financial status, people would be smart to view marriage as a business arrangement in addition to a romantic one.

My artist husband likes to say that if I were in charge of our spending, we鈥檇 be sitting on milk crates instead of furniture and that if he were in charge, we鈥檇 have no retirement accounts.

The fact that we have both nice furniture and retirement funds is a testament to compromise 鈥� and the聽.

Married people are significantly wealthier than single people in every age group, and the gap tends to widen as people approach retirement age. Married couples age 55 to 64 had a median net worth, excluding home equity, of $108,607 in 2011,聽. By contrast, single men in the same age bracket were worth a median $14,226 and single women $11,481.

Income and education also contribute heavily to wealth 鈥� and to the likelihood that people will marry. But a聽聽found that even after controlling for those and other factors, marriage itself contributed to a 4 percent annual increase in net worth. The same study found that wealth typically began to drop four years before a divorce, which ultimately reduced people鈥檚 wealth by 77 percent.

Since marital status is so powerfully associated with financial status, people would be smart to view marriage as a business arrangement in addition to a romantic one. Taking a few pages from the business world has certainly made our 19-year marriage stronger as well as wealthier.

Here鈥檚 what works for us:

Conduct due diligence

Before a 鈥渕erger of equals,鈥� companies can spend millions of dollars and countless hours scrutinizing each other鈥檚 financial details, performance and prospects. You don鈥檛 need to hire a fleet of lawyers and accountants, but knowing what each person owns and owes before marriage can prevent unpleasant surprises later.

Create your own financial statements

You need two: a balance sheet showing your net worth as a couple 鈥� your assets minus your debts 鈥� and a cash flow statement, which shows your current incomes and expenses. Use these documents to judge your financial health, spot potential problems, such as spending more than you make, and track your wealth-building progress.

Draft your business plan

Successful businesses聽聽and decide where to concentrate their resources. So do couples, who have to figure out how to save for the future (with retirement, emergency and college funds, for example), pay off the past (mortgages, student loans, credit card debts) and live their lives in the present (paying the bills and having some fun). You鈥檙e likely to have more goals than money to achieve them, so you鈥檒l need to decide together which are the most important and how to divvy up your income among them.

Appoint a chief financial officer

Chances are one of you is better at the day-to-day financial details, such as paying bills and monitoring financial accounts. Having one person take responsibility for these chores helps make sure they get done. The CFO also may be the person who researches large purchases, does the tax returns, shops for insurance and rebalances the investment accounts. The CFO does not, however, make financial decisions unilaterally. In the business world, the CFO is responsible to the board of directors. In a marriage, the partners are responsible to each other and should be making the big decisions together.

Commit to full disclosure

Publicly traded companies have to keep their shareholders informed with quarterly financial statements, audited annual reports and announcements of major events. Couples don鈥檛 have to keep to a federally mandated schedule, but regular meetings to review the finances are a good idea. Disclosure is key if you鈥檙e going to make sound financial decisions together. Unfortunately, a recent Harris poll for NerdWallet found that 1 in 5 Americans in a relationship with a partner who鈥檚 saving for retirement聽.

A similar proportion of those saving for retirement haven鈥檛 disclosed the amounts to their partners. That鈥檚 bad enough, but what鈥檚 worse than lack of disclosure is deliberate dishonesty. Hiding debts, concealing purchases and having secret accounts all undermine intimacy and trust. That doesn鈥檛 mean you can鈥檛 have separate accounts or 鈥渘o questions asked鈥� spending money to reduce conflict. But you shouldn鈥檛 conceal or lie about your financial situation to avoid a fight. That鈥檚 a red flag that there鈥檚 something you two should be discussing.

Liz Weston is a certified financial planner and columnist at NerdWallet, a personal finance website, and author of 鈥淵our Credit Score.鈥� Email:聽lweston@nerdwallet.com. Twitter:.

This article was written by NerdWallet and was originally published by The Associated Press.

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