Planning a wedding is stressful. You have to worry about the dress, flowers, food, invitations, centerpieces, favors, you get the idea. I am living this stress right now as my fiancé and I (who am I kidding? It’s mostly me) plan for our wedding this fall. It is easy to get lost in the details of the wedding and not think about life after the walk down the aisle. However, if an engaged couple isn’t on the same page about financial matters, their marriage could be doomed before it even begins.
Financial problems are one of the biggest causes of divorce. While these problems are sometimes prompted by unexpected events such as a job loss or illness, other times, the problems stem from disagreements over how money should be handled. This is something that can be dealt with ahead of time. By understanding each other’s finances, setting goals and agreeing to compromise on areas in which you disagree, you can set yourself up for a financially-sound, happy life together.
Here are some things you should talk about before saying “I do”:
- Your financial past – Have you filed for bankruptcy before? Do you have a bad credit score? If one spouse has a bad financial past, it can have an impact on the couple’s ability to get credit together in a future for things like a car or house purchase. If one or both people in the relationship have had financial problems in the past, make a plan of action as to how you will rebuild your credit.
- Your financial present – How much money do you make? Do you have any debts? You will want to make a budget that you will use once you get married. In order to do this, you will have to know how much income will be available and what debts need to be paid, in addition to your normal monthly living expenses. Setting and sticking to a budget is one of the best things you can do to ensure your financial stability and, therefore, your marital stability.
- How will the day-to-day finances be handled? – Who will ensure that the bills are getting paid? How much will each person contribute financially to the household expenses? Will you have a joint bank account or separate accounts? Some people combine all of their money and pay all expenses out of one account. Other couples prefer to keep their money separate and each is responsible for paying certain bills. Discuss the matter and find out what works best for the two of you.
- Your attitude toward money – Do you consider yourself a spender or a saver? If one spouse is a spender and the other is a saver, there can be a lot of arguments about where any extra money you might have is going. If you find yourself in this situation, it might be a good idea to allot a certain amount of your budget each month to each person to be spent as he or she pleases. That way, the spender can spend and the saver can save without disrupting the household finances.
- Your goals for the future – Do you plan on buying a house, having kids or starting your own business? Most of the big decisions that you will make as a married couple will involve money. You have to discuss how you will get yourselves financially ready to attain your goals. Also, even though it seems like a long way off, you are never too young to start planning for retirement. It is a good idea to make saving for that one of your goals for the future.
The biggest key here is being honest. While there may be disagreements when you first start discussing financial matters, take the time to talk through your differences and come to a compromise. Putting the talk off won’t make it any easier. If you are already married and find yourselves in financial trouble, because you didn’t sort these issues out years ago, give Steidl & Steinberg a call. We may be able to help set you on the right track for the future.