Marriage is both a romantic and financial partnership, but many couples operate without a clear picture of what the financial partnership part actually looks like. The mistakes below are fairly common, and most of them are fixable if addressed early.
1. Not Being Fully Informed About Household Finances
This is a big one and something I see too often. Many married couples never sit down together and discuss the full financial picture. One spouse may handle the bills, investments, or debt without the other spouse knowing the details. That creates vulnerability. If something happens to the financially active spouse, the other spouse may not know what accounts exist, what debts are owed, or where assets are held. Both spouses should have access to and a full understanding of all income sources, expenses, assets, investments, and liabilities. A yearly financial check-in is a simple way to prevent this gap.
2. Assuming Employer Insurance Is Enough
Many people assume their employer-provided life or disability insurance is sufficient. It often is not. Group disability insurance is usually not portable, may cover only base salary, and often uses a narrow definition of disability that excludes partial or occupation-specific impairments. Employer life insurance is typically a flat amount or some multiple of base salary that does not account for the family’s actual needs. Private policies, tailored to the household’s real financial exposure, provide much stronger and more reliable protection.
3. Not Having Private Life and Disability Insurance
According to LIMA (Life Insurance Marketing and Research Association), only 57% of men and only 46% of women own life insurance. Also, many married couples fail to cover the stay-at-home or lower-earning spouse, which is a big oversight. When it comes to disability insurance, the statistics are even more dismal. According to the US Census Bureau, less than 31% of working-age adults have private disability insurance. That is a huge problem because disability is statistically much more likely than death during one’s working years. If the breadwinner spouse becomes sick or injured and cannot work, the household may lose the income it depends on for the mortgage, groceries, and daily living expenses. Life insurance protects against death. Disability insurance protects against the loss of income while the insured is still alive. Both are essential, and both should be reviewed regularly as income, obligations, and family circumstances change.
4. Not Updating Beneficiary Designations
Beneficiary designations on life insurance policies, retirement accounts, and other assets do not update automatically when life changes. A divorce, remarriage, birth, or death in the family can make an old designation outdated or even create legal disputes. In 26 states, beneficiary designations on life insurance are automatically revoked upon divorce, but relying on that is risky. Beneficiaries should be reviewed and updated after every major life event, and the policy or account paperwork should reflect the current intent.
5. Not Naming a Contingent Beneficiary on Life Insurance Policies
Many people name a primary beneficiary on their life insurance but never name a contingent (secondary) beneficiary. If the primary beneficiary predeceases the insured, or if both die in the same accident, the death benefit may pass to the insured’s estate rather than to the intended recipient. That can trigger probate, delay access to funds, and in some cases result in the money going to someone the insured never intended. Naming a contingent beneficiary takes a few minutes and prevents a problem that can take months or years to untangle.
One important caveat: do not name a minor child as a primary or contingent beneficiary unless the life insurance policy is placed into a properly structured and worded trust. Without a trust, the proceeds may be held by the court until the child reaches the age of majority, which can create delays and complications that defeat the purpose of having the coverage in place.
6. Not Considering a Postnup When Circumstances Change
A postnuptial agreement is not just for couples in trouble. It is a practical tool for addressing financial changes that happen during marriage. When one spouse steps out of the workforce to raise children, when income shifts dramatically, or when a business is started or sold, a postnup can clarify how those changes affect the financial relationship. Without one, the couple may be left relying on assumptions that no longer match reality. A postnup can also address how life and disability insurance should be structured to protect both spouses under the new circumstances.
7. Not Planning for College
College costs continue to rise, and many couples delay planning until their children are in high school. By then, the window for tax-advantaged savings has narrowed. Starting early with a 529 plan or other education savings vehicle gives compound growth time to work. Even modest monthly contributions can make a meaningful difference over 10 or 15 years. Waiting until college is imminent often means taking on more debt than necessary.
8. Not Planning for Retirement
Retirement planning often gets pushed aside in favor of more immediate expenses. But the cost of delaying is steep. Every year without contributions is a year of lost compounding. Couples should be contributing to employer-sponsored plans, IRAs, or other retirement vehicles consistently, even if the amounts are small at first. They should also be aligned on retirement goals, expected lifestyle, and when they plan to stop working. Misalignment on these points can create conflict later.
9. Financial Infidelity
Financial infidelity is not always about deception. Sometimes it is about avoidance. One spouse may hide spending, keep secret accounts, or avoid conversations about money because they are uncomfortable. Over time, that erodes trust and creates financial blind spots. Having separate accounts for personal spending like hobbies or discretionary purchases is fine, as long as both spouses agree on the arrangement, set a maximum spend threshold before discussing it with their spouse, and keep the household finances fully transparent. The key is communication, not secrecy.
10. Not Having a Financial Plan for the Marital Home
The marital home is often the largest asset a couple owns, but few couples have a clear plan for what happens to it if circumstances change. If one spouse wants to keep the home after a divorce but cannot qualify for a refinance due to insufficient income, the options may be limited. Planning ahead, including understanding how income can be created or structured to support qualification, can prevent a forced sale or financial distress. This is especially relevant for couples where one spouse has stepped back from the workforce or where income is uneven.
The Bottom Line
Most of these mistakes share a common denominator: couples avoid difficult financial conversations until something forces the issue. The fix is not complicated. Talk openly about money. Review insurance and beneficiary designations regularly. Plan for the big expenses early. And when circumstances change, update your agreements and coverage to match the new reality.
Jeffrey A. Landers, CDFA®, CDLP® is the Founder and CEO of Hello Monthly Income™, LLC, a specialized nationwide insurance agency that helps divorcing people protect their receipt of alimony and child support payments with life and disability insurance.
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