“Stop, Collaborate and Listen…” – Money and marriage [INFOGRAPHIC]

First, I think marriage is one of the most sacred things a couple can do, whether it is traditional or same-sex marriage. Two people willing to commit their lives together, no matter what happens to the either person, and provide love and companionship for the rest of their lives.

But bringing two lives together can cause some friction, at whatever age you marry. There are different philosophies on holidays, raising a child, who does the laundry, and how to manage money.

Even managing money has it’s own sub-sections. When do you pay bills? Do you do it the day they arrive in the mail, or the day before the deadline on the red-letter notice? What priorities do things have in the budget – does saving for Christmas come before a vacation? Can your spouse spend money on flowers every month or do you see that as wasteful?

It’s important to have these conversations before you get married. Many people don’t, and that can put a strain on a new marriage. So what does someone in my position, who works with couples in various stages of marriage, see and suggest should be done to maximize your financial situation?

iStock_000011785655Medium

 

1. Talk about it before an engagement occurs

There are lots of things that make a marriage work, and, in my opinion, just having love doesn’t cut it. I have seen clients struggle because they had such different methods of handling money and it led to problems with them growing their wealth.

While talking about what things you want out of life – where you want to live, what type of teaching / administration career you envision, how many kids you want to have – talk about how you have learned about money and how you want to handle it going forward. It will be one of the hardest questions you face as a new couple, and chances are you may find things that you don’t like. But that’s ok – it’s not supposed to be perfect. It’s supposed to be out in the open. By both of you bearing your soul before marriage, you’ll be able to find out if there are any deal-breakers in your partner’s life that would stop you from marrying them.

 

2. Don’t make any big decisions in the first year of marriage, or even before getting married

I’m a traditional guy. I didn’t live with my wife until we were married. We lived in an apartment for the first two years of our marriage while we sorted out where we were going to work, how close we wanted to be to friends and family, and while we saved up to put a down payment on a house.

I have heard countless times of people buying houses when they were engaged; they broke up and then had to deal with the fallout. Am I saying it’s wrong to do so? No, of course not! While I’m traditional, I’m also realistic and know that I’m in the minority – people buy houses, boats, cars, and multitudes of other things before they get married.

However, due to way the law in our country works, it is far easier to divide assets (should that time come) when a married couple purchased them. If you’re going to be making any purchases before you get married, talk to a lawyer about how you should title these assets to prepare for the worst.

   


 

3. Decide who will take care of the every day finances

When people get married, there is usually someone who likes detail and another who is a big thinker, or the saver versus the spender. There’s nothing wrong with either approach, but the detailed/saver person should be in charge of the budget. Regardless of how you pay your bills and manage your monthly spending, it’s usually easier if one person takes responsibility for these duties.

In our house, I have always done our day-to-day finances. That’s not to say my wife couldn’t do it, but she doesn’t want to. She trusts that I will take care of things, and I respond to that level of trust by giving her regular updates of how things look. We talk regularly about money and what our everyday budget looks like. While we brainstorm together, I take care of seeing if ideas will fit.

I have heard of couples switching every couple of years as to who pays the bills. If you don’t want to shoulder the burden forever, maybe this approach would work for you?

 

4. Make long-term goals a priority

One problem I see with newlyweds is a disjointed mindset when it comes to money. One may have a focus on the future, the other is living for the now. This is also the part about money that results in the most fights, and contributes to money being one of the main reasons for divorce filings.

This one is short and sweet: Talk about your goals now. Don’t wait or guess. Get it out in the open and start to plan. Write it down. If this step seems hard, it’s because it is – many people hire a financial planner to help them outline their goals, understand how much it will cost, and if their vision is realistic.

 

5. Plan for life events before they happen

It easy to spend money. But, like Vanilla Ice says –“Stop, Collaborate and Listen…”

When you bring your finances together, now is the time to talk about what you want to do with your life, but most importantly, how much this may cost. If you want to travel in style every couple of years, plan on having children soon or buy a “forever home” before retirement, then make a savings plan for this. Even if you don’t have these plans thought out, something as far out as saving for retirement needs a savings plan.

This is the ideal situation for newlyweds – Sit down and figure out how much you will earn as a couple. Determine some big goals and understand a timeline – whether they are in the next 5 or 35 years. Agree on how to save for these goals and then set up some automatic savings.

 

It’s easier said than done! If you’re in this position and would like someone to go through this process with you, I’d be honored to help. You can get in touch using the big, green button at the top of the website.

 

In case you’re wondering, here’s the infographic courtesy of my friend and fellow advisor Lauren Estes.

 

Love-and-Marriage