Ah, spring is in the air, to be swiftly followed by the usual flurry of June weddings. Cake, venue, invites, rings … so many details to determine, dreams to fulfill, photos to be shared on social media.
Have you and your betrothed talked about the money?
For richer or for poorer, marriage and money matters go hand in hand. When you sign a marriage license, you’re not only promising to have and to hold, you’re agreeing to one of the biggest, broadest financial commitments you’ll ever make. And yet, seeing eye to eye on finances is often easier said than done. As a couple, you each bring your own financial personality to the partnership. You’ve each got ingrained scripts that took years to develop, based on individual triggers, habits and lessons learned - essentially your relationship with money.
It’s no wonder solid conversations and an understanding of each other’s financial hopes and realties are essential to a successful marriage. Whether you’re newly engaged, newlyweds, or nearing your silver anniversary, that calls for open lines of communication and shared financial practices you can agree to, or at least compromise on. Sorting through one another’s strengths and weaknesses usually takes plenty of time, tolerance and, above all, candid conversations.
To help with that, we have a wedding gift to offer: our Cogent Couple “Money Talk” Topics. Don’t just wing it on these. Schedule some dedicated time to talk – at least an hour. Find a space where you’ll both feel comfortable tackling potentially tough topics. Listen as often as you speak. Also, consider jotting down your individual answers in advance, before sharing them with each other. We’ve heard this often leads to a better and more valuable conversation.
Cogent Couple “Money Talk” Topics
- What is your annual income?
- What benefits does your employer offer?
- How long do you plan to work in your current position? What are your plans for a change?
- At what age would you like to retire?
- Do you expect your spouse to work full-time, part-time or at all? For how long?
Cash-flow, savings and bills:
- Today and moving forward, what dollar amount and percent of your income are you willing to devote to the household’s monthly bills?
- Today and moving forward, what dollar amount and percent of your income are you willing to contribute toward savings and investments?
- How much do you believe should be kept in an Emergency Fund?
- Which of you will have the responsibility for paying which bills?
- Are you willing to have joint checking, savings and investment accounts after you’re married?
- Do each of you want to have an individual account for spending purposes? If yes, how much would be funded into those accounts each pay period?
- How much debt do you have? Is it educational or credit card debt? Itemize the following: Creditor, remaining balance, monthly minimum, term, interest rate and any arrears (i.e., if you’re behind on payments)
- How much debt is acceptable or unacceptable to you? Why?
- What is your credit score?
- If your partner has credit card debt coming into the marriage, are you willing to pay it off with your income or savings?
- Do you think your partner should be willing to do the same for you, and to what extent?
- Are you planning to maintain or obtain individual credit cards in your name?
- How do you feel if your partner is planning to do the same?
- Do you wish to have joint credit cards for you and your spouse? If so, how will each of you contribute to the payments?
- Do you want to have children? If so, how many and how soon?
- Will you or your partner leave the workforce to be a full-time parent? Which of you will leave the workforce and for how long?
- What are your ideas about educating your children?
- Do you intend to fund their education and, if so, to what extent and using a 529 Plan? Describe what this would look like for each level from kindergarten through graduate school.
These topics should at least get you started, including this recent article on financial coaching for the young adult. In my experience, I’ve seen so many different couples handle their money management in so many different ways. There is no one “right” answer. That said, an approach that serves your best interests should be aimed at generating these ideal outcomes:
Your Financial Life Together
- Bills are paid on time.
- Regular saving and investing occurs.
- Debt load doesn’t destroy your net worth.
- Both of you participate in the household finances, each to your abilities.
- The amount of time, money and/or energy each of you are contributing feels equitable.
- Even if one of you is the primary head of the financial household, the other one is still “in the loop,” familiar with the big picture and able to step in if needed.
- Both of you can access your financial accounts, insurance policies and estate planning documents.
As a financial literacy advocate to my clients and other families (including my own!) I often hear stories of friends’ and clients’ children marrying and making a brave go of it. Some enjoy great success in their new partnership. Others crash and burn.
Either way, their approach to money management is often a key contributor. Being married is so very different in so many ways from being single, it’s well worth having that money talk before you say, “I do.” Especially if initiated at the outset, good discussions around shared finances and family matters should lead to a stronger marriage and better outcomes.
Ongoing communication counts too. We encourage you to periodically revisit our Cogent Couple “Money Talk” Topics, to ensure you remain on the same page. Whether it’s over coffee or a glass of wine, approach your “check-ins” as opportunities to explore where you stand today and where you both want to be in the future. I’d like to think that’s what love, marriage and money is about: facing life’s challenges and celebrating the milestones together, until death do you part.