Discussing Money Matters Before You Say I Do
Planning to say “I Do” involves big decisions. While those decisions primarily revolve around your ceremony, don’t forget there are many other matters to consider, including finances. Experts agree that managing finances is one of the most vital components of a marriage and is often cited as the number one stressor in a relationship. Don’t put off discussing these topics before you tie the knot.
Whether or not to merge incomes into one account is a very personal decision. Major things to consider are spending, saving and investing habits. Some partners might combine all monies, while others keep their finances separate. Or, couples may embrace a hybrid plan and share a portion of money in a joint account, while keeping individual funds in separate accounts. Whichever you choose, it’s important to have open dialogue about each others’ expectations regarding how money will be handled.
Be honest with each other about debt and how much, if any, each of you owe. How individuals deal with debt varies greatly and could become a source of discord if there is an imbalance in how you approach your debt. Discuss plans to pay off current balances as well as how you plan to use credit in the future.
When it comes to money, people often develop strong beliefs and habits early on that can be hard to change. It’s good to have a frank conversation about spending and saving preferences. One partner may have strong opinions about saving or budgeting, while another doesn’t. Another partner may be more free spirited with money and doesn’t like to stick to a plan. It’s smart to discuss behaviors and habits and decide how you will approach various scenarios.
When one partner makes significantly more than the other or one partner does not work outside of the home, that can throw things out of balance. Make sure there is clear communication about how finances will function. The higher earner may feel that they are entitled to dictate how money is spent. Or, if one person typically handles all of the finances, they may feel they have more say so or power. Discuss these roles early on and ensure you are in agreement.