Money and Marriage: Five Financial Tips To Know Before the Big Day
Many people think money and marriage go together like fire and gasoline, but only if you and your partner are not on the same page. I often get asked, “Why is money and marriage so important”? Financial issues are currently one of the leading causes of divorce in America today. Establishing a strong financial plan with your partner can save you from frustrating fights and headaches down the road.
In order to be on the same page with money and marriage, we’ve put together our top five tips that could help your marriage prosper for years to come:
Money & Marriage Tip #1 - Discuss Financial Goals
You can’t shoot for a goal if you don’t have a target. Open communication is the key to discussing financial goals. Listen to what your partner wants and expect your partner to do the same. You will quickly figure out what motivates your spouse to get out of bed.
Why do they go to work every day? Do they want to save for a house, travel the world, or simply have enough money to live a comfortable lifestyle? Figure out which goals you both align on, and ones differ. This could help you figure out what you may be spending your money on for years to come.
Here are a few questions to consider:
- Where would you like to live in the next five years?
- Are you planning on having children?
- Where/when do you want to retire?
- What is your view on debt?
- Do you want to combine finances/remain separate after marriage?
Money & Marriage Tip #2 - Air Out Dirty Laundry
This one may or may not apply to all situations, but it could be the most important. Be sure to tell your partner if you’ve had financial issues in the past and own up to your financial mistakes. It doesn’t matter how bad, but your partner should be aware of the financial situation they are getting into before marriage. The key is to keep and open and honest policy, and be sure to make your partner feel comfortable talking to you about past mistakes without shaming them.
Money & Marriage Tip #3 - Create a Budget
Budgeting can be a hard topic for most couples because they may feel like it’s a constraint, but in reality a budget is great way to figure out where your money is going. Sit down with your partner and discuss your financial goals and establish what you plan to spend your money on each month. This can help ensure that you or your partner are not spending too much money on unnecessary purchases. Think of it as an accountability tool.
Money & Marriage Tip #4 - Establish Financial Responsibilities
Along with a budget, establishing your financial responsibilities could help you save a lot of headaches down the road. Figure out who is good at keeping track of finances and paying bills. Most couples have spenders and savers. I would recommend putting the “saver” in recordkeeping/bill paying role, but make sure the “spender” is aware of the bills coming in and money being saved. Think of this as a pilot and co-pilot situation.
Money & Marriage Tip #5 - Expand Your Financial Knowledge
There are so many personal finance books out there with many different messages today. I recommend reading a few books by different authors to determine which ones make the most sense to your financial situation and goals. We all have different dreams and aspirations, so there’s not really a great cookie cutter approach on how your want to manage your finances throughout life. A lot of books have great underlying principles, so focus on these principles and how you want to cater them towards your life. Both partners should read these books to make sure everyone is smart enough to make wise financial decisions. Although there are thousands of personal finance books out there, here’s a few that I recommend a few for starters:
Total Money Makeover: A Proven Plan for Financial Fitness by Dave Ramsey
One of my personal favorites for paying off debt and being smart about money and marriage. Dave lays out a proven financial plan with a baby step formula for achieving financial freedom.
The Millionaire Next Door: The Surprising Secrets of America’s Wealth by Thomas J. Stanley
This book teaches the habits of everyday millionaires and how they get achieve their financial dreams. It may be simpler than you think…
The Compound Effect by Darren Hardy
No gimmicks. No Magic Formula. The Compound Effect is a distillation of the fundamental principles that have guided the most phenomenal achievements in business, relationships, and beyond. This easy-to-use, step-by-step operating system allows you to multiply your success across many different segments of your life.