Engaged couples have so many things to talk about while planning their weddings: seating arrangements, their honeymoon destination, future kids... and money.
Money may not be the most romantic topic on the pre-wedding agenda, but it's probably the most important. According to a 2012 study of over 4,500 married couples, fights about money are the biggest predictor of divorce—above fights about in-laws, kids and household chores.
Clearly, couples who get on the same financial page before the wedding are in a better position to enjoy years of married bliss. If you have not yet had the following conversations with your sweetheart, make sure you do before you say "I do."
1. Your Money Beliefs
We tend to think of money as a simple matter of mathematics, but it's actually a very emotional topic. People develop beliefs about money (also known as money scripts) in childhood, and those beliefs can be very difficult to change. If you and your future spouse have opposing money scripts, you may find yourselves regularly arguing simply because you do not agree on the nature and purpose of money.
Before you tie the knot, take the time to talk about your earliest memories regarding money. Not only can this sort of conversation help you to better understand how you each shaped your current views of money, but it can also help to bring you closer since you will be sharing some of your childhood emotional development.
2. Your Assets and Liabilities
No one enjoys talking about retirement account balances, student loan debt, and credit card statements. But marrying without an understanding of where you each stand financially is a big mistake. Couples need to be completely transparent with each other about their financial situation. Finding out that your new spouse is up to his or her eyeballs in debt would be a terrible wedding night discovery.
3. How (or If) You Will Combine Your Finances
There are many different ways to merge financial lives, and it's important to discuss how you plan to do so before the wedding. Not only may you and your sweetheart have completely different ideas of how married finances should work, but you need to hammer out the specifics that will work for you both even if you are generally on the same page.
4. Your Major Financial Goals
Though you might have a basic idea of each other's goals—that she wants to stay home with the kids, for instance, and you hope to retire to the beach—it's important to remember that you need to have regular conversations about your goals and how you plan to achieve them. A goal is a dream with a deadline as the saying goes, but without discussing your goals you will not be able to plan for them.
5. Who Will Handle Money Management
One person naturally emerges as the money manager in most couples, but that is not always the case. Figuring out ahead of time who will handle everything from bill payment and balancing the checkbook to shopping around and price negotiations can help you to assign those chores to the person who will be best at them or who has the time to do them. Getting on the same page with money management questions can help you avoid costly mistakes (like forgetting to pay bills) and major arguments.
Conversations Shouldn't Stop Once You Get Married
Money is the biggest stressor in marriage and couples who start off great can still get into fights over money down the road. That's because finances are relatively simple when both people are young, earning more and more money each year through promotions, and there are no kids involved. If you don't want to let fights over money dominate the marriage, then heed my advice and follow these money moves that can strengthen any marriage. It can also help your bottom line.
- Get on the same page. People get angry with their spouses when they have unmet expectations. If you expect that your spouse's big bonus this year will make a nice contribution to a retirement fund, while your spouse is dreaming of blowing the whole enchilada on a vacation to Aruba, it's likely to cause some friction. So, how do you combat the problem of differing expectations? Talk to each other, regularly, about money.
Set aside some time to discuss both your short-term and long-term goals. Include what you'll do on future vacations, how and where you want to retire, what your career plans are, and how you'll handle any money emergencies. In particular, having a conversation about things you enjoy that cost money—my husband and I love to talk about our top 10 travel destinations—can help put you on the same page when it comes to money planning. Since we know that traveling together is one of our goals, my husband and I are in agreement about how to handle day-to-day finances so that we can save up for those goals.
- Pool your resources. No matter how independent each of you may be when it comes to money, it's important that you regard money as a shared resource, rather than mine/yours. This is especially true if there is an income gap between the spouses. Without some method of sharing money for bills, food, evenings out, childcare, etc., someone is likely to feel resentful about spending "their" money on a shared expense.
This doesn't mean that every couple needs to have a joint checking account. Each couple will find their own system, whether they share cash in envelopes for expenses, each has their own accounts plus a joint checking account for bills, or put everything together under both names. No matter what system you choose, remember that your resources are for the good of the marriage.
- But keep some independence. It's important, however, to feel as though you have some financial independence since no couple will entirely understand each other's spending habits. So, allow yourself some "me" money that is yours to spend however you choose. Both you and your spouse will be happier knowing that you can treat yourself to small luxuries without it affecting the overall finances.
- Delegate. In many marriages, one spouse is a money nerd and the other doesn't bother to balance a checkbook. Even if the differences between your money skills are not that great, there is generally one person who ends up taking over the finances. And that's often a good thing. When two people are both trying to handle one job, things can be overlooked, done twice, or otherwise mismanaged. Go ahead and delegate bill-paying and money management to the spouse who is better at it or prefers the job.
- Keep the lines of communication open. The problem with delegating, however, is that sometimes the non-money manager spouse feels out of the loop. So, even if only one person is handling bills, make sure that both are involved in decision-making, problem-solving, and budgeting. So, the non-money manager spouse should feel comfortable asking about finances at any time, and the money manager spouse should always keep all financial information transparent. This is also crucial so that if anything were to ever happen to the manager spouse, finances would not then become an additional source of stress during a sad time.
Money may not seem like a particularly romantic topic of conversation, but ignoring money is not the path to wedded bliss. Make sure you and your sweetheart have these money conversations early (and often) to avoid romance-killing money conflicts. Don't let money get in between you and your sweetheart. It's better to keep talking about tough issues and face them together than let them fester and breed resentment.