FIVE CONVERSATIONS BEFORE "I DO!"
Congratulations! You are engaged and have started planning your dream wedding. You have considered who should be in your wedding party, what music will be played and where the special day will take place. However, marriage is a big step and having a serious discussion about finances with your soon to be spouse is important. Therefore, it is shocking that most people generally do not discuss finances and household responsibilities before saying “I do”.
Below are five recommended
topics of conversation for you and your future spouse to discuss.
Share your spending habits:
When it comes to spending, you
need to be honest with your spouse about your habits.If you are honest with each other, you are
more likely to work together to reach your goals in a trusting
relationship. However, if you are
dishonest, you may find yourself hiding your credit card charges or arguing
over the balance of the checking account. You should consider that
there may be a reason why your spouse pinches every penny or spends every
dime. Having a conversation about a
habit can lead to a stronger and more thoughtful relationship. In addition, it enables you to set realistic
goals with your spouse about saving and spending.
Transparency:
Having a mysterious credit
history is not a turn-on. In fact it can
be a turn-off. Your soon to be spouse
may have a prestigious high-paying job in New York City but, he may also have
hundreds of thousands of dollars of student loan debt. Having debt does not necessarily need to be a
deal breaker for you. However, it will
help you to set realistic saving goals.
For example, an individual who
accumulated thousands of dollars in credit card debt and has a diminished
credit score, may influence a spouse’s ability to purchase a house. Together, you and your spouse can repair
credit damage and pay off debts.
However, it is hard to repair something that you do not know is
damaged. The key is
transparency.
Discuss how you are combining your finances:
Each relationship is
different. Understanding how each
spouse’s income is going to be treated and how the expenses are going to be
paid varies from couple to couple. Some
couples merge all their income and expenses, others keep everything separate. Whereas, others follow a hybrid model of
keeping some income and expenses joint and others separate. Once you have decided how the income and
expenses are going to be handled, one spouse needs to take the lead on managing
them and monitoring the monthly cash flow.
Often times the spouse who is
monitoring the cash flow is seen as the spouse with more financial control and
knowledge. However, with honest
conversations about expenses, both spouses can feel equally involved in the
decision making process.
Define your financial goals:
Everyone has a financial
goal. Perhaps it is to save up for a new
set of golf clubs or a small starter home. On the other hand, it may be to be a stay-at-home parent. Whatever it may be, you should share those
goals with your future spouse. You will
receive a greater understanding of your spouse’s desires and it will help
develop a serious discussion about the reality of those goals.
Financial Advisor:
Having a financial advisor to
provide knowledge, resources and insight is exceedingly helpful when developing
a financial plan. You want to pick a
financial advisor who is honest and makes you feel comfortable. Your advisor will work with you to develop
your financial goals, plans surrounding a major life event and tax strategies,
among other things. It is never too
early to pick a financial advisor, since you want to develop a long-lasting
relationship with an individual who understands you as a couple and your future
plans.
By having these serious
conversations about finances, you are building a healthier and stronger
relationship with your spouse.
[1] This
is from a study conducted using longitudinal data from more than 4,500 couples
as part of the National Survey of Families & Households.
