Money is a sensitive topic — even between loved ones. When my husband and I got married, money was the last thing on our mind. The only knowledge we had of each other’s finances was that neither of us had any debt, both of us had some savings. My husband didn’t even know my salary. Knowing each other’s financial makeup better would not have changed our decision to marry but it would have made our newlywed days a lot less stressful. Money was the contributing factor in a lot of our early arguments. And it took us a good two years before we decided to sit down calmly and talk about money. Given that money is cited as one of the top contributing factors in divorce, it is essential that couples have conversations before marriage to establish where each of them stands financially. Here are a few questions to ask before you say “I do.”
Are your goals compatible?
For the first few years of our marriage we saved absolutely nothing, so we made a budget. But we failed miserably. We not only didn’t save, but we felt miserable trying. We were not enjoying what we did spend our money on. Then we had a talk about where we wanted to be financially in the next five to ten years and set specific goals. Did we have any major expenses on the horizon? How much did we need in total for each of these expenses? How much did we have to save every month for these? Only after giving “a name” to every one of our dollars were we able to make progress in our savings. Every time we wanted to buy something, these goals made us pause and think about our priorities — common priorities that both of us set together.
Are your spending & saving styles compatible?
In our relationship, I am the spender and my husband is the saver. That doesn’t mean I spend recklessly; I just need more structure and goals to keep my savings on track. My husband, on the other hand, usually never spends anything with the exception of one of two expensive wants. Before we made a spending plan, this personality difference contributed to some of the arguments we had early on. After a year of not saving much, I felt, as someone who doesn’t spend on anything big, that it was not my fault; however, my husband felt that since he only splurges once or twice a year it wasn’t his fault either. Only after we set some financial goals for ourselves and made a spending plan could we save and spend on things we both loved.
What are you bringing into the marriage?
We didn’t bring any debt into our marriage. We didn’t bring any assets either, other than a very modest savings account. So this part of our finances was uncomplicated. But if one of you is bringing substantial assets or debt into the marriage, it is important to talk about how those will be handled. Will you be considering the debt as a combined debt that both of you will pay off or will that be kept as one person’s responsibility? If one person has a lot of assets, will pre-marital assets be kept separate? Will it be beneficial to have a prenuptial agreement?
What will be your money management arrangement?
Some people are comfortable having combined accounts, some prefer to keep it separate, and the rest fall somewhere in between. Any of these arrangements is perfectly fine if it works for both of you. You should not assume the other person will agree to whatever arrangement you prefer. It is best to talk about the pros and cons of each method and decide on the best arrangement.
What are your financial roles?
When we started taking control of our money, I wanted my husband to be involved in every single financial decision we made — budgeting, spending, choosing the best savings account, where to invest, etc. My husband honestly couldn’t care less; he thought that since I liked finances so much, I would make the best decision for us. Without knowing his logic, I felt like he didn’t care about our finances and resented that. After going back and forth several times, now we know where we stand. We each have our strengths and handling finances is one of mine. So I handle everything in our household from budgeting to investing. We established a limit of “$x” above which every purchase has to be discussed, like how necessary the item is or if it is possible to get a better deal if we wait to purchase it.
How will your financial communications be?
After establishing our financial roles, it is absolutely essential to figure out how communication will be handled. Even if one person exclusively handles the entire household’s finances, the other person should know what is going on at all times. My favorite way to do this is to schedule financial dates. Once a month we go out to a coffee shop just to talk finances — how we did that month, our net worth, any upcoming financial decisions, anything that needs changing, etc. Initially, we were arguing a lot, but these days I look forward to our financial dates as a great time to dream about our future together.
As two people join their lives together, it is essential that both of them work toward their common goals and be honest with each other. Understanding each other’s strengths and weaknesses before tying the knot will make it a lot easier to enjoy the marriage.
Did you (or will you) talk about finances before your marriage? How did you handle your finances as newlyweds? If you had to do it over again, would you do anything differently?