When you sign a marriage license, you’re not only promising yourself to be married to someone, you’re agreeing to a huge financial commitment. Marriage and money matters go hand in hand. And seeing eye to eye on finances is often easier said than done. As a couple, you each bring your own financial personality to the partnership. You’ve each got ingrained scripts that took years to develop, based on individual triggers, habits, and lessons learned that have influenced your relationship with money. Solid conversations and an understanding of each other’s financial hopes and realities are essential to a successful marriage.
Whether you’re newly engaged, newlyweds or nearing your silver anniversary, it's important to maintain, or begin in some cases, open lines of communication and shared financial practices that you can agree to. Sorting through one another’s money strengths and weaknesses requires candid conversations. If you're not sure where to begin, schedule some dedicated time to talk about money as a couple. Here are some conversation starters.
*What is your annual income?
*What benefits does your employer offer?
*How long do you plan to work in your current position? What are your plans for a change?
*At what age would you like to retire?
*Do you expect your spouse to work full time, part time or at all? For how long?
Cash Flow, Savings, and Bills
Today and moving forward, what dollar amount and percent of your income are you willing to devote to the household’s monthly bills?
Today and moving forward, what dollar amount and percent of your income are you willing to contribute toward savings and investments?
How much do you believe should be kept in an emergency fund?
Which of you will have the responsibility for paying which bills?
Are you willing to have joint checking, savings and investment accounts after you’re married?
Do each of you want to have an individual account for spending purposes? If yes, how much would be funded into those accounts each pay period?
How much debt do you have? Is it educational or credit card debt? You should itemize the following: Creditor, remaining balance, monthly minimum, term, interest rate and any arrears (i.e., if you’re behind on payments).
How much debt is acceptable or unacceptable to you? Why?
What is your credit score?
If your partner has credit card debt coming into the marriage, are you willing to pay it off with your income or savings?
Do you think your partner should be willing to do the same for you and to what extent?
Are you planning to maintain or obtain individual credit cards in your name?
How do you feel if your partner is planning to do the same?
Do you wish to have joint credit cards for you and your spouse? If so, how will each of you contribute to the payments?
Do you want to have children? If so, how many and how soon?
Will you or your partner leave the workforce to be a full-time parent? Which of you will leave the workforce and for how long?
What are your ideas about educating your children?
Do you intend to fund their education and if so, to what extent and will it include using a 529 plan? Describe what this would look like for each level from kindergarten through graduate school.
Achieving Ideal Outcomes
In my experience, I’ve seen so many different couples handle their money management in so many different ways. There is no one “right” answer. That said, an approach that serves your best interests should be aimed at generating ideal outcomes that include bills paid on time, regular saving and investing and a debt load that doesn’t destroy your net worth.
Both of you should also participate in the household finances, each to your abilities and make sure the amount of time, money and/or energy each of you are contributing feels equitable.
Even if one of you is the primary head of the financial household, the other one should still be “in the loop,” familiar with the big picture and able to step in if needed. Both of you should also be able to access your financial accounts, insurance policies and estate planning documents.
As a financial literacy advocate to my clients and other families (including my own) I often hear stories of friends’ and clients’ children marrying and making a brave go of it. Some enjoy great success in their new partnership. Others crash and burn. Either way, their approach to money management is often a key contributor.
Being married is so very different in so many ways from being single. It’s well worth having that money talk before you say, “I do.” If initiated at the outset, good discussions around shared finances and family matters should lead to a stronger marriage and better outcomes. Ongoing communication counts too.
Whether it’s over coffee or a glass of wine, approach your “check-ins” as opportunities to explore where you stand today and where you both want to be in the future. I’d like to think that’s what love, marriage, and money is about: facing life’s challenges and celebrating the milestones together until death do you part.
Date Posted: Monday, May 14th, 2018 , Total Page Views: 1833
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