It is said that money is not everything and it should not come between two individuals. But, that’s what exactly happens if you see the data. Almost 50% of the marriage in the USA ends up in divorce. Financial problems and disagreement are one of the major reasons why so many couples separate.
Since you agreed to marry the person it should not come as surprise when you learn about their financial activities. But that’s exactly what happens – because you never bothered to discuss the finances before the marriage.
Discussing financial matters with your partner is very important before you say I Do. It is important that you both are on the same page when it comes to finances.
How do you know if you are financially compatible?
Start by Talking About the Finances
A lot of couples feel shy to ask about the finances. When you are getting married it is kind of important to know what is the spending and saving style of your partner. This is going to have a huge impact on your life together when you start managing your finances as a couple. If you are not compatible financially, it could pose a very serious threat to your relationship.
So start talking as soon as possible so that it does not come as a surprise. Share the information about the number of bank accounts you each have and how much money you have been saving. Knowing about each other’s finances will help you in marriage financial planning.
Since you are getting married you must have envisioned a life you want to build together– buying a house, having children, buying a car, traveling etc. You need to set financial goals. Start with your long term financial plans like retirement. This is important if you are both working and will contribute to the retirement expenses. Likewise, you need set goals as to how much you need to save, spend on important things and how much you are going to keep for your personal expenditure. This will also include how you are going to pay off your debts.
Bring up the touchy topic
No one wants to fight over money. But, if you keep ignoring some of the irresponsible behaviors of your partner, over the time the tension will build up and you are going to lose it eventually. It is important to discuss the matter calmly. You don’t have to throw the matter at their face suddenly. Ask casually and if their financial behavior bothers you suggest things and make it reasonable. There are numbers of ways to bring up financial issues and the more tactfully you do it the better.
Overspending is one of the major issues that couples have to deal with. What looks like overspending to you may not be the same for your spouse. It is important to discuss it and try to see the matter from their point of view.
Marriage financial planning is very important for making the marriage work. You need to have some long term and short term goals as a couple. At the same time, you need to have personal financial goals that will help you accomplish your personal goals like that course you wanted to take or new home office you wanted for yourself.
Working together will help you keep track of your finances and understand each other personal financial needs. Working together will also eliminate any feeling of being shut out from each other’s decisions.
Discuss the Debts
Money is a very sensitive issue for couples. Discussing the major issues like debts is very important. Even if you feel embarrassed to tell how much you owe on your student loan or credit card debt, it is essential to discuss it. You will be spending the money together, so make sure that your partner knows what they are getting into before you both get married. Not discussing the debt issue can make the other partner get blindsided when the matter becomes a major financial issue for them. It is better to address the matter earlier in the relationship than later.
Merge or not to merge
Having a joint account is cute. It gives you the feeling that you are really together. Your accounts should be merged because you really need one not just because you can. Having a joint account takes care of things you need to tackle as a couple – rent, bills, taxes, loan payments and all. You each can contribute into the account and build it as per your needs. But, if only one spouse is working then there is no point in having a joint account. Likewise, you should have a separate account just for your expenses as an individual so that going to a spa or buying a video game does not put a strain on the family budget.
These are some of the ways for an effective marriage financial planning. Make sure you get into it way before you say I Do so that you walk into the marriage with eyes open and not feel blindsided.