Money tends to be an overlooked topic of conversation for couples headed down the aisle. I guess it’s not surprising. Talking about finances is far from romantic. However, your choice of marriage partner is likely one of the biggest financial decisions you will make. If you consider that you are going to be spending a lifetime with this person, it is safe to say they are going to be a huge influence on how you handle finances.
To help you choose wisely, let’s discuss some steps you can take before the wedding bells ring to make sure you set yourself and your future life partner up for financial success.
1. Talk about your individual experiences with money. Did you each pay for your college education? How about your first car? Did you work in high school and college? How did each of your families spend money? While there isn’t a right or wrong answer to any of these questions, they should get the communication ball rolling. The answers are likely to give you some insight into the behaviors and preferences that are already ingrained in you and your significant other. It’s OK to have differences, but it’s good to be aware of those differences so you can make sure they aren’t going to cause issues in your marriage.
2. Pay attention to spending habits and attitudes. Where do you and your significant other regularly spend money? What hobbies and priorities do you each have? Do you have conversations about saving? Is this important to you both? Do you ever consider cheaper options or shop around for big purchases? Are you both conservative when it comes to money, or do one (or both) of you spend like it’s going out of style? These are some additional questions you can ask about yourself and your future life partner that may glean information about what you can expect as a married couple. When you take a closer look, do you see any red flags?
3. Talk about each other’s financial goals and how you might achieve them. What plans do you each have for the future? Buy a house? Change careers? Travel? Have children? Go back to school? This conversation is important because even though the two of you might be on the same page with your lives right now, your individual visions for the future might be very different.
Once you’ve talked about goals, you can take a deeper dive into how you hope to achieve them. The point is to get a better idea about whether you are both inclined to plan for the future. We all know reaching a goal doesn’t typically just happen. Many times, it takes planning, hard work, dedication, and sometimes sacrifice. How do you find yourselves reacting when you think about planning for your goals? Do you both enjoy laying out a plan for reaching them, or do you detect personality differences in this area?
4. Prepare a joint budget. This budget can be a very rough guesstimate. The primary objective is to go through the exercise together and see what conversations arise. Do you have a disparity in earnings between the two of you? If so, does that seem to be a source of contention? Is one of you more comfortable with sticking to a budget than the other? What differences in opinion do you have when it comes to determining categories and how much to spend where? Again, do you both prioritize saving money, or do other categories seem to come first?
5. Lay it all out and be honest. Getting into a serious relationship without full financial disclosure is a dangerous proposition. Marriage is a partnership, and you both need to be aware of each other’s financial position—till death do you part. Do not hide things, no matter how questionable you think they might be.
There are a couple of things you can do to start down this path. First, you can each work on creating your own net worth report reflecting all your assets and liabilities. Then you can review your net worth reports together and use the opportunity to ask questions. Second, you can each get a copy of your credit report and credit score and share them with each other. Knowing your credit score and reviewing your credit report at least annually is a good habit to start. When reviewing the reports, make sure you look for any surprises and errors that might need to be fixed or otherwise dealt with.
6. Discuss what happens after the wedding (financially). Do you plan to combine finances? At this point, we will assume you have already worked through the previous five suggestions. In that case, you should already know what accounts each of you has and be ready to have a conversation about what makes sense when it comes to combining finances. Do you plan to combine everything (what’s mine is yours)? Or do you prefer a different arrangement whereby you each might have separate accounts and separate bills to pay?
How will you divide financial responsibilities? Will one of you take the lead on managing your finances? It’s not uncommon for the more money-savvy spouse to handle the finances. However, it’s important that both spouses stay engaged in conversations on financial matters and remain educated about what is going on. Doing so will help reduce the likelihood of misunderstandings and guard against an unfortunate scenario where the financial head of household might become unable to take care of things. If the financial lead were to become ill or die, the other spouse should be able to step in without much difficulty.
The #1 Rule: Communicate
You may have noticed a theme: Communication is key! If ever in doubt, the best thing you can do is talk about it. It’s unlikely that you and your spouse-to-be will tackle any of the topics above and end up feeling like you can’t move forward with the relationship—that’s not the goal. The goal is to make sure you are both going into the marriage with eyes wide open.
You don’t want to make a big life decision and stumble upon some significant surprises after the vows are said. It’s no joke that money is one of the leading causes of divorce—we are trying to keep you from being part of that statistic! So have the unromantic conversations; doing so could help ensure you enjoy a lifetime of wedded bliss!
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