Money is a frequent source of arguments in marriage so it makes sense to talk about finances before getting married. Yet, many couples avoid those discussions both before and during marriage. Often, it’s because they grew up in families uncomfortable talking about money. Unfortunately, this can lead to serious conflicts damaging the couple’s relationship and finances. Before you walk down the aisle or even if you are already married, ask each other these financial questions:
- What is your current financial situation? Both sides should disclose their income, assets, expenses, and debts. No one should go into marriage without understanding their financial picture and it is best to get this information as soon as possible to make appropriate plans. If either of you has debt, you should discuss how it will be managed during marriage. Who will pay it down and how? If you are embarrassed to talk about it now, imagine how much worse it will feel when your spouse finds out you’ve been keeping secrets.
- How do you envision managing separate and joint money during marriage? This is a broad question that involves multiple areas. For example:
- Will you maintain separate accounts and/or have a joint account?
- How will you decide how much money you can afford to spend and save separately and together?
- How will bills/debt be paid (ex. what account will be used, how much does each side contribute, etc.)?
- How will you manage day-to-day financial tasks (ex. balancing the checkbook, checking credit card statements, etc.)?
- Who will take primary responsibility for which tasks and how will you keep each other informed and participating in decision-making?
- What are your expectations about how you will live during marriage? This includes discussing issues like your standard of living (ex. you want a large home in a particular area), child rearing (ex. you want to be a stay-at-home parent or send your kids to private school), career choices (ex. you want to go back to school or open a business), retirement (ex. you want to travel the world), and even family (ex. you want your aging parents to move in with you when the time comes).
- What are your short, medium, and long-term goals? You need to understand each other’s goals so you can make appropriate plans. Maybe you need to pay off student loans, or you want to buy a house and start a family within 3 years, or retire early and be a snowbird. How are you going to accomplish these things in your chosen timeframe? How will you compromise if all goals aren’t achievable?
- How do you view money? We all learn financial lessons early in life and default to those ingrained habits. Are you a saver or spender; conservative investor or risk-taker? Do you pay on time or only pay the minimum? Why do you feel this way about money? You probably absorbed certain viewpoints and practices from your family even if they never once spoke about money. Your financial values influence every purchase and decision. If you don’t discuss them, then it will be difficult to address problems.
When you fail to talk about finances with your fiancé or spouse, you risk jeopardizing your relationship and financial situation. At best, you may not be as efficient as you could be in how you manage your finances because you aren’t speaking to each other about your needs and goals. At worst, you end up arguing constantly about what you’re spending and saving and making bad decisions that affect both of you.
If you don’t feel comfortable talking about money, it may help to bring in a daily money manager (DMM) for guidance. A DMM can review your finances and help educate you about your situation, create a budget that meets your needs, teach you how to manage your finances, take over tasks that you don’t want to handle, and recommend other experts as needed (ex. accountant, financial planner, debt counselor, attorney, etc.).
Contact us for a free consultation to learn how we can assist you.
