You’ve booked the reception, tasted the cake, bought an amazing dress, but there’s one thing you haven’t done yet: talk about money!
Don’t worry. It’s not too late, so you won’t have to call the band and cancel it. With this ultimate guide full of important financial issues, you and your fiancé can discuss all the financial details so you’re ready to have a great day.
It turns out that at least 35% of marriage problems stem from money. And that makes sense – because most people have different ideas about who should work, how much they should earn, how much money they should spend, and how much savings they need to make for a comfortable life.
If you both have conflicting views on money and neither side tries to negotiate, the consequences can be disastrous!”
Ask questions about money before you get married
How much debt do you have? If you get to the point where you ask the “big question” yourself and answer it, you probably know the answer to that question. If you don’t know, find out now.
Even if your future spouse’s debt belongs to him or her, it may still affect you. For example, if you plan to pool your income, your partner will have to allocate most of his or her income to paying off loans and credit cards.
Who is responsible for the settlement? This question is necessary for a married couple to understand who will be financially responsible for the household. It’s important to determine who will take on the financial work, while ensuring that both partners feel like a team and work together to achieve mutual financial goals. Talk to your future spouse about how you feel about paying your bills. One person pays the bill and the other may not pay, or vice versa. If you both don’t like paying your bills, take turns doing so, and that will make you equal. If both partners discuss their situation and decide on a plan early in the relationship, arguments around the bill can be easily avoided.
Are we going to do some preliminary preparation?
It may be obvious, but that doesn’t make it any less uncomfortable. Sokunbi says, “No one is hoping for a divorce, but it’s important to verbally inform your partner if you can sign a prenuptial agreement.” A prenuptial agreement not only protects your financial assets, but also gives you the opportunity to determine who will be financially responsible in your marriage. And, if you have children in a previous relationship, you can explain how they will be taken care of. Since only 5 percent of couples arrange a wedding before marriage, a partner’s request for a wedding can be a source of anxiety and friction. However, Sokunbi says that people with extreme affluence or people in other special financial situations are not pushed into marriage. Some people get married simply to protect things like precious family heirlooms.
Do I have a joint bank account or do I have a separate bank account?
Another way to talk about money before marriage is to think about whether to pool, share or use both bank accounts. The decision depends on everyone’s preferences and the couple’s needs.
Dr. Bonnie Ecker Vail, a relationship specialist in New York City, believes that having a single joint account as well as a separate account without spending guilt can help many couples.
Maintaining a joint account can give a clear picture of a family’s full financial situation so couples can make appropriate financial decisions, she said. “It shows that the couple is working together toward long-term financial goals,” she says.
How much are we willing to spend when our parents are sick? Quantifying that amount is difficult. Thus, this question is closer to acknowledging that these kinds of problems can arise.
Who will be responsible for investing in our future? Actually, you both need to be involved in investing in the future, but let the person in charge of planning the family gathering talk about it.
What standard of living do you expect? What do you think we should spend our money on?
Everyone has different ideas about where their money should go. Some may prefer to have a cheap apartment and travel luxuriously on weekends. Someone else may prefer to live in a safer neighborhood than drive a new car.
Each of you will probably have significant and minor expenses. Deciding what is most important to each of you will allow you to find the most free way to spend your money.
Also, by knowing what is important to each of you, you can see what is not important. If you both have no interest in cars, don’t spend $35,000 every two years on a new car.
How do we manage money in marriage? There is so much to unpack here. In fact, it’s not just one question, it’s a whole problem. There are questions.
Who is going to pay the bill and handle the settlement deposit?
Are we going to collect all the money or do we put the bill aside?
If we have a separate account, how do we fund it?
Do I have all the income and do you have all the income?
So, how do I split the expenses?
How often do we talk about our finances and money goals?
If someone needs our money, what do we do? Long-term commitments, such as marriage, tend to lead to unforeseen circumstances over time. One such situation can be borrowing money from family or friends who need help. What if your elderly parents can’t pay for their house? How are you going to handle this situation as a couple? Be sure to think the same thing before anything happens. You won’t want to argue about when you should be generous with your money. Discuss with your partner how much money you can give and under what circumstances your generosity is guaranteed. By talking about these instances, you can be prepared for something to happen, and you won’t have to worry about feuding with your partner.
What do you enjoy spending money on?
While you’re not spying on anyone, we can all agree that sometimes spending money on fancy spa treatments isn’t the same as throwing a party at a fancy restaurant every Friday night, right? So it’s best to find out what you and your partner consider a valuable treat. “This question may seem trivial, but it’s important to understand what each of you considers a waste of time,” Sokunbi advises. “It could be food, travel, shopping, electronics, etc., But I don’t want to put an economic burden on the relationship, especially if one of you doesn’t join in spending that kind of money.”
How has money affected our upbringing?
In deciding how to talk about money before marriage, consider having an open discussion about how your parents handled money, including what they thought they did well and what they could have done better, and how that affected your financial expectations and goals, Vail says. This is a valuable element of how to talk about money before marriage, but it’s often overlooked.
In many cases, raising an adult shapes his or her financial goals.
Who will do the work, and how much will we reasonably earn as a family?
When discussing living standards, donations, and other expenses, it is also important to determine who will work, when, and how much you can expect to earn.
Is your wife taking five years off to raise children? Will she be a full-time homemaker? Do you both want to live modestly and retire at 40?
Many relationships have struggled with different perceptions of who works and how much work there is to do. Especially after children are born, there can quickly be anger about who goes to work and who goes home.
When should I consult with each other before buying? In the same vein, how much can everyone spend before registering with their spouse?
The ideal way to avoid feeling like your expenses are closely monitored is to set aside a certain amount each month for each spouse’s entertainment. You can spend this money whenever you want. If you want more, you’ll need to consult with your husband to make sure the spending doesn’t hurt your family’s finances.