Talking about money before marriage is vital. Money talks before marriage can give your love its best chance of making it through the marital minefield and growing into the lifelong treasure you’ve both dreamed about. A lot of pain and suffering can be avoided if partners have frank discussions about money before tying the knot.
A 2010 Citibank survey found that 57% of all divorced couples pointed to money problems as their #1 reason for making the split.Divorce almost always causes heavy financial damage to both partners in the form of hefty legal fees, tax bills, alimony, child support and other payouts.
It’s important to make sure both partners have a clear picture of each other’s debts, assets, financial attitudes and money habits. It’s also important to discuss how they’ll handle money to create the best future they can have. In this way, a couple can move past the more rational considerations and on to the things that matter most.
Below are 5 talks to have about money with your partner before getting married. Each one can be fun if handled in a non-judgemental way, so both sides feel comfortable sharing all and getting “financially naked.”
Marriage Talk #1: Attitude Toward Money
What’s each partner’s attitude toward money? Are they spenders? Savers? What are their opinions on emergency funds? Debt? Credit cards? Budgeting? Impulse shopping? Come up with a list of topics about money attitudes and discuss them. Knowing each partner’s approach to money will help to paint a picture of what the marriage will be like.
What does each one think about saving for retirement? What’s each one’s favorite thing to spend money on? What’s the last big thing each partner bought on impulse? Another good subject is Mom and Dad. How a person’s parents have dealt with money is a good indicator of how they’ll approach the issue too.
Marriage Talk #2: Debt
Both partners should come clean about their debt burdens. How much credit card debt does each one have? How much debt from student loans? Are there other debts? What’s each one’s plan for paying off their debts? This may seem like a touchy subject, but it’s important to bare all. Successful marriages are built on trust, and trust begins with honesty.
Couples don’t have to go as far as basing their entire relationship on credit scores. There’s an entire dating site that matches potential mates based on credit score alone. This might be a bit extreme.
What if you’d been dating someone for two weeks and they told you they had a half a million dollars in debt? Would it be a deal breaker? Now imagine you didn’t find out until a year or two after marriage.
Debt doesn’t have to be the end, however. As Bill* relates:
“In my 20’s I was a commercial fisherman. I’d be at sea for a month, then home for a month, with a huge paycheck in my pocket. Every time I got into port I’d spend it all and then some. By the time I met Cassie*, I was over $30,000 in the hole from credit cards. We had a talk about it and agreed that when we married, she’d take charge of the finances. I got a job on land and worked, and she gave me a weekly allowance.”
Did it work? Twenty years on, they have two beautiful high-school age children, a big house on the coast and another at a world-class ski resort.
Marriage Talk #3: Income
Knowing how much each partner will make is crucial. Along with debt and savings, knowing each person’s income builds a total picture of the marriage’s financial health. This way, both people know exactly what they’re getting into. Will the couple be able to afford the family they want? If not, maybe putting off the marriage for a short time will help them get a better footing. Also, how will each one’s income shape the marriage work load?
For example, let’s imagine a bride who makes $50,000 a year, while her groom makes $25,000. They might decide it’s cost effective for the groom to quit his job once they have children. They’ll lose his income, but they’ll also do away with childcare costs by having him stay home and take care of the kids.
Marriage Talk #4: Financial Goals
Talking about goals with an intended spouse can be a lot of fun. Don’t worry if the ideas seem out of reach at first. What kind of wedding will you have? What kind of house? How many children? What kinds of vacations, and how many? What about recreation? Will both partners keep their income, or will one stay home to raise the kids? Have fun with it and dream big. Then at the end, bring the pie-in-the-sky down to ground level and talk about how the dreams might be brought into reality. Online calculators can give a good idea how much those dreams will cost.
Marriage Talk #5: A Plan for Handling Finances
If there’s no plan for handling money consciously, it will get spent unconsciously. That kind of mindless spending leads to trouble.
This is where budgeting comes to the rescue. A couple just about to tie the knot doesn’t have to hammer out every budget item to the last detail. However, talking through the idea of budgeting avoids a lot of conflict down the road.
Budgeting boils down to having every dollar spent on paper every month before it even comes in through the door. How much will the couple spend on gas? On groceries? On rent? Utilities? How much will they save each month?
There are some helpful budgeting apps available to smooth the budget conversation. Using one of them can show a couple what their married life will feel like. Will there be a lot of stress from not making ends meet, or will their daily lives feel free of money worries? Playing around with any of the following budget apps and tools can help:
- Mint.com offers a budget tool and app to help couples get control of their finances.Mint.com. Free. This online tool and app tracks income and expenses. It can give a good idea of how a person stands financially. It also suggests ideas for cutting spending, based on an examination of a user’s past habits.
- GoodBudget. $4.99/mo. This top-rated budgeting tool lets love partners share their budget performance. It syncs across multiple smartphones and other devices.
- Pocket Expense Personal Finance. $4.99. This popular app helps users plan their budgets, track their spending, and set and reach financial goals.
- Visual Budget. $4.99. This app lets users categorize their spending and plan for the future.
- Spending Tracker. $2.99. This app boasts a simple and intuitive user interface. Its budget mode helps users set and stick to spending goals.
Who Will Take Charge of the Plan?
One partner might have more financial skill than the other, or more time to do the job. Who will be the one to take on the responsibility of handling the money? Which partner will pay the bills, and how will the pocket money be doled out? Will there be joint accounts, or separate ones?
Happily Ever After
Marriage can be a beautiful thing. As writer Franklin P. Jones once said, “Love doesn’t make the world go round. Love is what makes the ride worthwhile.” The more each person understands their companion, the more worthwhile the ride will be. Knowing a partner’s attitudes toward money, and how they’ll both handle it together, will make it easier to move forward without fear. Doing that can help a couple make room for the things that really matter
*Names changed to protect source.