The Most Important Financial Discussions to have Before Marriage

by David Sung

Bringing up the uncomfortable and sometimes dreaded ‘money talk’ with your future spouse can be tough.  People’s values, behaviors, and attitudes related to money vary significantly, but combining two different belief systems is essential for a strong relationship.  For example, is a private high school education for your kids worth the extra money?  While one party might think the public education they received prepared them for adulthood, the other party may disagree.  Topics like these will have a big impact on how you save for the future and your overall marital happiness, which is why you should have these conversations as soon as possible.

Why the Talk is Important before You Make the Walk

An extensive study that followed more than 4,500 husbands and wives found that there is a significant correlation between couples who argue about financial disagreements and divorce.  Financial disagreements are the number one predictor of divorce.  In a study done by the National Foundation for Credit Counseling, they found that almost 70% of adults had some negative feelings about discussing money with their fiancés, and more than 20% said the discussion could lead to other issues.

Questions to Ask

Income:  Discuss whether both of you plan to pursue a career, and if children are in your future, which spouse will take care of the kids if both of you are working?

Expenses:  This is one of the touchier subjects, but you need to discuss it. Where will your spending priorities be, both as a couple and individuals?  Topics such as travel frequency and child education funds need to be discussed, as well as budgeting schedules. Don’t forget to mention any student loans, car loans, or credit card bills.  Total those expenses and create a plan to pay down the balances.

Accounts:  Will you have joint checking or savings accounts with your partner?  Should any purchase above a certain amount be considered by both parties?

Savings/Investing:  How much money will be saved, and for what are you saving?  What are your savings goals – do you want to save for retirement, your child’s college education, or a house?  Will you make riskier investments in the stock market or more conservative investments into a 401(k) or mutual fund?

Prenuptial:  Couples with no children, few assets, or who are entering their first marriage, might not consider getting a prenuptial agreement.  Couples with children from a previous marriage or with more assets, on the other hand, may want to have this conversation.

Put Everything on the Table

Before tying the knot, make sure both of you are aware of each other’s financial standing, the good and the bad.  It’s better to be completely transparent than surprised later.  Not only could this save you from some future arguments, but it is also ensures that if something happens to one of you, the other will know about all of the debts that the other owes.

The earlier these topics are covered, the more harmonious a marriage tends to be.  Begin by laying out exactly how you feel about money and what you see for your future together. You might consider hiring a financial advisor to help the two of you make plans, goals, and recommendations.

A happy marriage begins with openness, honesty, and willingness to succeed.  Leave a comment below with your advice for couples who are just starting out!

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