You may be thinking that two can live as cheaply as one – and a couple with two incomes can even live better. Truth is financial issues are one of the top reasons couples divorce. Before you put the rings on each other’s fingers, have a frank talk. These 5 tips will help you start the discussion.
1. Start Slowly with a Simple Question. It may give you an interesting answer. Ask how your significant other’s family handled money. It doesn’t necessarily mean that he or she will follow that pattern but it will give you some understanding of what shaped his or her attitude. Some who grew up with spendthrift families will be focused on saving. Or, not! But, understanding the past will help you understand the foundation of a person’s financial style.
2. Discuss the Here and Now. Ask your intended how they would describe their financial personality. It’s a simple question, but the answer might be telling. Does your future partner think of themselves as a saver or a spender? Are they saving for the future – or even a future purchase? Or, does their paycheck get spent before the next one is issues? You probably have a clue from your time together, but this is a good way to start a deeper conversation about how both of you handle money.
3. Ask the Big Question! Ask about your intended’s current financial health. Both of you need to be transparent in disclosing where you stand right now. Are you carrying student debt? Have you had a bankruptcy in your past? Do you have money in the bank? What about investments and savings accounts? You’re going to have to work out a shared budget as man and wife – understand what that budget may need to include.
4. Ask about the Future. Ask what long term financial goals are in the bigger picture. What are the current short-term goals. How do the two of you mesh? Do you have common goals? Or, does one of you want to buy a home as soon as possible – with a pool? While the other wants to become debt free before making a major purchase of any kind. Look for the compromises and see if you can find a shared financial path for the future.
5. How are You Going to Go Forward as a Married Couple? You need to know how you are going to handle money once you share a home and a last name. Many couples opt for a yours, mine and ours approach. Each partner has their own bank account which gives them the freedom to make some of their own financial decisions. The joint bank account should cover joint expenses – from rent or the mortgage to groceries. It’s a great idea to include savings in your joint plan. Finding agreement on finances before the wedding is not only wise; it can save future disagreements both small and large.
If one of the engaged couple is bringing significantly more money into the union or if one of you already owns a business, you may want to go beyond the discussion and contact a family law attorney. You may think because you brought it into the marriage that the funds or business will remain yours, but that is not always the case. If you receive profits or pay expenses from a joint account, that can muddy the waters. Don’t be afraid to visit a family lawyer together and see if a prenuptial agreement might give you both the protection you want. You can clarify all the details. It’s not something to fear or avoid, talking with a family law attorney can help you define a future that protects the future for both parties.