Money is great when you have it and scary when you don’t. When you’re ready to tie the knot, you’re not only melding hearts and lifestyles but also melding finances.
When you’re in love and planning a future with your beloved, discussing finances before marriage may not be the first topic of conversation that comes to mind.
However, talking about finances before marriage is vital to ensure a long-lasting commitment.
According to a study by Ramsey Solutions, a financial education company, finances are the second leading cause of divorce, just after infidelity.
When you’re looking for the best outcome in love, you must address these nitty-gritty details.
So, how to talk about finances before marriage?
The article articulates 6 tips on how to have the money talk before marriage.
1. Don’t hold back
Money talk before marriage isn’t an easy topic, especially if you have excessive debt or less-than-responsible spending habits.
However, when you’re ready for a lifelong commitment, these are the pieces of your life that need to be shared with your partner. They’re not only signing up for you, but they’re also signing up for your financial situation.
Share your income and debts with your partner. List your assets and savings. When you’re married, you each take on the other’s liabilities and assets.
There is beauty in this process; perhaps you can help your partner pay down debts more quickly or vice versa.
However, even if that’s not the case, it’s better to be upfront and not blindside one another with hidden debts that impact your overall quality of life.
2. Budget, budget, budget
During your money talk before marriage, discuss expense management with your partner, from the most minimal purchases to those bigger ones, like vehicles and mortgages.
If you and your partner are both actively working, assess who has the higher income and what that means for the relationship. If you are making more money than your partner, you may need to contribute more to living costs or use the extra income to save for your retirement.
A joint bank account makes finances transparent, giving you both an opportunity to see where improvement may be required.
However, many couples opt to keep individual bank accounts and use a joint bank account solely for mutual purchases and expenses. This is an agreement you must reach with your partner.
This conversation is about making sure you are each comfortable with the financial arrangement you agree upon.
3. Spender or saver
Even if you and your partner are entering marriage with zero debts, personality determines who is the one who loves to splurge and who is the one who loves to tuck money away for a rainy day.
Either way, have the money talk before marriage and determine who’s who.
This is especially important if you both love to splurge, as you’ll need to set some boundaries and be realistic about your regular spending.
A better route to take is to invest in mutual funds, create a plan for your combined future, and pour into that regularly.
Bassinets, baby showers, and newborn outfits are fun considerations, but food, diapers, and doctor visits can throw off your budget. This is not even considering the rest of a child’s life; think sports, outings, and college funds.
If you and your partner plan to have children, it’s important to discuss career changes for childcare, babysitting costs, and lifestyle changes.
For example, retirement funds may take a backseat, and working hours may need to lessen for the primary caretaker. Although children eventually leave home, they may require financial assistance into adulthood.
Some children return home after a failed business venture or illness.
It’s important to have a financial conversation before marriage about these possibilities with your partner; this way, you can create a plan to tackle any possible scenario.
Also watch: How to manage your money.
6. Talk about extended family
When you come together with a new spouse, you’re taking on everything they come with.
Sometimes, that means taking on the medical expenses for a sick parent, helping with childcare for a widowed sister, or just helping a brother-in-law down on his luck.
So, during your money talk before marriage, lay it all out on the table.
Let your partner know where your money gets funneled off to and arrive on an agreement that ensures you are both comfortable with the spending.
While it could be that you have to budget expenses that include extended family, you may also have to discuss how you each feel about receiving money from extended family.
Maybe your partner’s father wants to gift you a down payment for a new home or wants to provide a new car.
While this type of generosity appears favorable, it may create friction within the relationship.
Discuss how much you are willing to give and how much you are willing to receive to keep a good balance at home.
If you feel disconnected or frustrated about the state of your marriage but want to avoid separation and/or divorce, the marriage.com course meant for married couples is an excellent resource to help you overcome the most challenging aspects of being married.
Carole Cullen is a Licensed Marriage and Family Therapist in Wake Forest, NC. She is a Certified Gottman and Emotionally Focused Therapist specializing in working with couples in crisis. Carole has over 20 years of experience helping couples using practical tools to create a lasting love.
Carole and her husband Chris have been married 16 years and love spending time with their 2 children, Matthew and Sophia. You can learn more about working with Carole at mytherapistnc.org.