Kevin Simpson* says financial stress is the number one stress in most marriages, so being financially prepared and on the same page can make the decision to get married easier.
Photo: Ben Rosett
Getting married is often one of the happiest decisions you’ll make.
Being financially prepared and on the same page as your future spouse can make the decision to get married easier.
Financial stress is the number one stress in most marriages, followed by annoying habits, according to a study conducted by SunTrust in 2015.
In addition, money issues have also led to 22 per cent of divorces, according to the Institute for Divorce Financial Analysis.
Here’s a checklist of 10 financial concerns to discuss with your spouse-to-be so you are more prepared and can enjoy your new life together.
Pre-marriage
- Avoid spending too much on the wedding
Far too often, couples feel obligated to spend a lot on their wedding.
The average cost of a wedding is $33,391, according to The Knot, a leading wedding planning site.
This amount did not include the honeymoon and also was more than doubled in expensive metropolitan areas.
While this day is special, spending so much on a wedding can burden new couples with heavy debt.
Many young couples already have student loans and credit card debt.
One way to avoid this is to plan a smaller wedding and to look for ways to make your wedding less expensive, but still enjoyable and intimate.
You can spend more when you celebrate your anniversaries in the years to come.
- Discuss your financial situation, fears and financial problems
Sometimes, one partner in a relationship has a lot of debt or financial worries.
It is important to discuss your financial situation with your soon-to-be spouse.
- Understand each other’s money mindset and spending patterns
How you spend money can reflect your upbringing, lifestyle, income and temperament.
If you grew up with frugal parents, you may be more inclined to save.
Being comfortable enough to talk about money is an important aspect of communication in your relationship.
During marriage
- Have shared goals and desired outcomes
When you make the decision to share your life with someone, your life is going to change.
Financial expectations and priorities can also change.
It is important that you check in with your partner so that you are on the same page for mutual goals that you wish to achieve as a couple.
This could range from buying your home to paying off debt or saving for retirement.
- Give each other some breathing room
Before you became a couple, you were a single individual.
Being able to retain some individuality is important and this pertains to your financial life as well.
Perhaps you can set aside some “play” money or cash that each of you can spend in any way you like.
Another way to do this is to have a shared account for your shared expenses that you both contribute to and then you are free to use your other individual income as you wish.
- Be honest
Another aspect of sharing a life with another person that is very important when it comes to your finances is honesty.
Avoid keeping secrets about money, whether it is debt you owe, expenses that you intend to make or any other financial purchase.
Often one partner hides money or has secret credit card charges.
It is important that both partners avoid lying about purchases.
- Be kind and treat your partner as you wish to be treated
It is easy to judge your spouse when he or she makes a mistake, but judging your partner can lead to miscommunication, hurt and fear about future communication and sharing.
Remember that everyone makes mistakes.
- Maintain budgets
Keeping track of your expenses will enable you to anticipate costs, save more and lower your stress.
Far too often, people fail to budget because it is tedious or time consuming.
Having a budget can prevent marital strife.
You may want several budgets that you separate by purpose.
For example, you could have a “home” budget that covers your rent or mortgage, utilities, insurance, food and home-related expenses and another budget for your “savings” together that would plan for your retirement, vacation, education or other long-term goals.
- Decide what are shared assets and what are not
Some couples have prenuptial or pre-marital agreements that explain what their separate assets are to prevent future arguments if a divorce would occur.
Salaries earned after marriage become community property.
You will want to take a closer look at houses and real estate, stocks you own as well as any gifts you give.
- Plan for kids and your estate
While this may seem early if you are a young couple just about to get married, having a plan for your future kids and your estate is important.
Beginning a will or living trust as part of your estate plan will give you peace of mind and help you put your financial house in order.
Having an estate plan will help you be more prepared and protect your spouse, children and loved ones.
* Kevin Simpson is the Founder and CIO of Capital Wealth Planning in Florida, USA.
This article first appeared at www.investopedia.com.
