How to talk about money with your partner before you get married
Deciding to get married is one of the biggest decisions you will make in your life. It also carries the potential for a seismic change in your personal finances.
The decisions you and your partner make about how you will manage your money will have implications for years to come.
While the thrill of the moment is to be savored, among the proposal, engagement, wedding, and honeymoon – if these traditional elements are part of your nuptials – don’t forget to have the “money talk”.
The independent asked a selection of personal finance experts and certified financial planners what they considered the most important things to consider before getting married.
Be open and make a plan
“Discover yourself financially,” says Danetha Doe, founder of Silver & Mimosas, a financial well-being platform for the self-employed.
“If you haven’t already, now is the time to divide your income, debt, credit scores, and credit reports among yourselves,” she explains. “I recommend doing this in a relaxed atmosphere – perhaps in a park with snacks and mimosas – to ease any tension that may arise.”
“You don’t want any surprises,” says Mark Wernig, principal at Dowling & Yahnke Wealth Advisors. “You need a meaningful conversation with full disclosure of your personal financial situation, whether or not you decide to pursue something jointly and combine your assets. Obviously, each party should be well aware of the story there. “
How you manage your finances in the future is crucial. You need to determine early on whether you will have joint accounts, separate finances, or a combination. It will depend a lot on your personal financial situation.
“These discussions need to happen early on to make sure everyone is fully aware of what you are bringing to the wedding. Everyone has to be on the same page, so it’s no shock once the wedding day arrives, ”advises Akeiva Ellis, financial planner and educator at Ballentine Partners, and ambassador for the board of directors of the CFP.
“I think it’s still awkward,” Wernig adds, “but there are things that need to be understood and maybe things that need to be rectified. I think it’s pretty healthy exercise.
Understanding your partner’s relationship with money
When you get the ‘talk about money’ you will start to get a feel for your partner’s relationship with money, but you may need to dig deeper and be specific as people can be shy when discussing. their finances.
“Ask questions like ‘how do you feel with money, what do you want your life to look like, what are your strengths and weaknesses in money and how much debt do you have? “, Suggests certified financial planner Shannah Compton Game, Millennium Money Podcast.
“Opening the lines of communication will help you both create a financial path based on partnership. Marriage is a financial transaction as well as a romantic transaction, so you should never avoid talking about money.
Ms. Doe agrees, “Understand each other’s money-loving tongues. We each have a slightly different relationship with money and what makes us happy. Take the time to understand why you are spending money the way you are.
Plus, she adds, “Share your money stories. What did you observe about money growing up? Our childhood experiences with finance largely influence how we engage with money as adults. The more you understand your education with money, the more you will understand yourself.
Stay interested, stay involved
This is not a one-off conversation – get in the habit of talking openly about money.
Autumn Lax, CFP, financial planner at Drucker Wealth, notes: “Some experts will say that money is the number one cause of pain in a marriage, so be comfortable with the subject early on and keep an open line of communication. regarding your expenses and expectations. “
“Along the same lines, definitely develop a budget,” she adds. “You used to spend your own way and your partner your own way, now you’re going to end up with different spending habits and a budget can help ensure the two work out well! “
Ms. Compton Game recommends that one way to stay on top of your financial situation is to make it a regular part of your time together. She encourages a weekly “money date” with your partner in which you set aside 20-30 minutes to review your spending from the previous week and ahead and make any necessary adjustments to stay on top of things. It also keeps the lines of communication open.
Mutual aspirations, with individual freedoms
This is your opportunity to decide not only your aspirations, but also the limits within which the two of you can function independently without seeking each other’s approval.
In addition to a “money date,” Ms. Compton Game suggests setting common monthly and annual financial goals.
“Let those goals create intention in your spending and savings so that every dollar has a purchase to get you closer to your goals,” she advises.
Ms. Doe says, “Talk about your financial vision. Are you planning to own a summer home? Do you want to take early retirement? Make sure you talk about your plans together and are on the same page about your financial direction! “
While working toward these goals, set parameters for your individual spending – each of your personal discretionary spending limits. Ms. Compton Game calls this your “max money” number.
“This is the amount of money the two of you can spend without asking questions or judging,” she says. “Once you get past that number, you both agree to a conversation and a mutual agreement before the expense is incurred. “
Call a professional
In most cases, neither partner will be a financial expert, and you will likely need help strategizing, for example, dealing with debts the two of you may have incurred in marriage.
By hiring a certified financial planner or consulting with an accountant, you may be able to find a more efficient way to pay off student loan or credit card debt that predates your relationship.
A personal finance professional will be able to help you find a way to reduce debt faster while maximizing your savings or making progress toward other goals.
Get that marriage contract!
When you are idealistic about marriage, remember to be realistic as well. If you want to be open and honest about your finances, remember to be honest with yourself about life – sometimes things fall apart.
“Marriage contracts are essential. Yes, no one likes to think about divorce and while we all envision living happily ever after, the reality is that over half of all marriages end in divorce in the United States, ”says Ms. Doe.
“Save time, money and frustration by sorting out these details in advance, and I hope you never have to think about it again.”