Your Most Important Financial Decision

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I am proud of many of the financial decisions that I’ve made in my life. I opened an IRA account while in college. I signed up for my employer’s deferred compensation plan my first day on the job, even though most of my co-workers said they were too young, had too little money, and that retirement was so far away. I am proud that I continued living below my means even as my income increased, and even as my peers inflated their lifestyles. But the decision that has had the most positive affect on my finances is marrying my wife. While, marrying someone is not just a financial decision, it is undeniable that it will have a huge impact on your finances.

The best investment strategies and savings advice won’t do much for you if you save and invest money while your spouse promptly spends it all. The leading cause for most divorces is financial stress. And a divorce will often leave you in financial shambles, as well as emotional shambles. According to a 2016 Fidelity survey, the top cause of money spats is the significant other’s spending habits.

Opposites often attract and a lot of times financial opposites attract. I’ve met a number of couples where one is the spender and the other is the saver. There’s the husband who wants the latest tech gadgets and the biggest flat screen television set. There’s the wife who has more name brand shoes than can fit in the closet and handbags which cost as much as or more than the big flat screen T.V. This causes conflict when the saver spouse doesn’t agree with those expenditure and prefers to save or invest that money instead. Sometimes the saver spouse will feel like he or she is getting the shaft and gives up on saving and spends on their wants too. I’ve also met some couples where both were spenders. In that case, they might agree on the SPEND SPEND SPEND philosophy, but their financial stress results when bills come due and money is tight.

I am very fortunate that my wife and I are pretty much on the same page when it comes to finances. In an old post from over two years ago, I wrote an Ode to My Frugal Wife. I wrote how we’d rather make an effort to make each other happier, rather than buy material things and spend money on things that won’t bring us happiness. But even though we have the same financial mindset, it was very helpful that we talked about these issues during a premarital counseling class. It is also important that we continue these discussions now that we’re married.

In a New York Times Article, Ron Leiber lists four money talks you should have before marriage.

1) How did your parents deal with money, how does that impact how you deal with it, and how might that impact the relationship?
According to the article, so many of our money behaviors are learned so it’s important to know your significant other’s “financial ancestry.”

2) Can I see your credit report?
A person’s credit report holds a lot of information about his/her financial past.

3) Who’s in control?
Gregory Kuhlman, a psychologist who runs marriage success training programs, says that control issues come up constantly when talking about money. He listed a few things that should be discussed: “If one person is making most or all of the money, does that person get to make most or all of the financial decisions? If you’re the car aficionado or have researched all of the local school options for the children, do you get to make the decisions about those things?”

4) Just how rich do we want to be one day? What is your “desired level of affluence?”
Mr. Kulman asks his clients, “are our career paths going to be something that pulls us together? Or, more often, are they things that will tend to pull us apart, where we’ll really have to be proactive to make sure it’s under control?”

I don’t recall many of the questions that my wife and I discussed at the premarital counseling class, but three questions stand out and they are questions we ask each other still when we discuss money.

What are your short-term financial goals?

What are your long-term financial goals?

How will we get there?

When my wife and I talk about finances, those are the core issues we focus on. Do we want to help our children with college costs in the future? Let’s open a 529 plan. Do we want to retire early? Let’s try to max out our retirement plans. Do we want to buy a house? Where should we go on vacation and how much will it cost?

I know that it is Valentine’s Day and talking about finances is not the most romantic thing, but to have a successful relationship, having conversations about money is necessary.

What are other “money talks” married couples and those looking to get married should have?

21 thoughts on “Your Most Important Financial Decision

  1. DC @ Young Adult Money

    I think Ron’s fourth question is so important for couples. I think the discussion will take it’s own course and will result in both members of the couple having a better understanding of long-term objectives. My wife is well aware that I’m not content working in corporate America my whole life, and that means working side hustles to test business ideas until I find one I will go “all in” on. But that means a LOT of time that could be dedicated to other things, but thankfully she is on board with me pursuing this.
    DC @ Young Adult Money recently posted…How I Cut Cable in 2017: A Step-By-Step GuideMy Profile

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    1. livingrichcheaply@gmail.com Post author

      Yes, that question is an important one. Having side hustles on top of the regular job is definitely something your spouse would have to be on board with and I’m glad your wife is.

      Reply
  2. Brian @ Debt Discipline

    Just like the other things most couple discuss plans for their future, marriage, kids, house etc. Money should also be part of that discussion. Understanding what each understand about the topic, each others start point, and overall money goals. My wife and I make a much better team now that we are working together with our finances.
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  3. Tonya@Budget and the Beach

    I’m not in a relationship right now, but money is going to be a huge factor with anyone I enter a relationship with. Not what they do or how much they make, but what their money mindset is. I have a very good guy friend who represents someone I could never be with because he is so far in debt, but he goes on ski trips and eats out all the time. He is in his 40s and has zero idea what his net worth is. I could never be with someone like that.
    Tonya@Budget and the Beach recently posted…Being BoldMy Profile

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    1. livingrichcheaply@gmail.com Post author

      I absolutely agree. The person’s money mindset is very important to me. I think it is probably a deal breaker if the person’s money mindset was the opposite of mine.

      Reply
  4. Mrs. Groovy

    How you feel about your wife is wonderful! Mr. Groovy and I are on the same financial page. We just got there by dumb luck. We neglected to have some of the important money conversations prior to marriage. But, we knew our values were very similar and those values cause us to behave similarly, financially. (I don’t think me speaks good English here but you get my point.)
    Mrs. Groovy recently posted…We’re Doomed: My Liberal Friend Bought a McMansionMy Profile

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    1. livingrichcheaply@gmail.com Post author

      That’s great the two of you are on the same page! Conversations prior to marriage about these topics are important but even without them, I think most of us have a sense of the other person’s values.

      Reply
  5. Laurie @thefrugalfarmer

    Great advice. I’ve seen so many people marry financial irresponsible people thinking it won’t be an issue but it always is. Personally, my hubby hates having anything to do with the finances but he doesn’t piddle away a ton of money either, so that helps. These days I’m making him look at our monthly spending sheets and net worth sheet so he at least knows what’s going on. Lucky for him I love the management part of it. :-)

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    1. livingrichcheaply@gmail.com Post author

      Right, and sometimes they think they can change the person. My wife is the same way…she’s frugal but doesn’t really like dealing with the finances. I definitely try to keep her involved and to tell her what’s going on so she’s not in the dark.

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  6. Kelly

    Great article. I and my husband talk money matters until we are on the same page on this. I believe it’s about defining goals that can help us make better financial decisions, as goals can serve as guide to this. And, in marriage, it’s also matter how open you can be when it comes to communicating to your partner that can help your marriage successful as money matter is one challenge/issue that couples need to go through.
    Kelly recently posted…The start of the GFC was 10 years ago this year – Where are we now?My Profile

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  7. Amanda @ centsiblyrich

    Great questions to ask! Thankfully, my husband and I have always pretty much been on the same page. Having shared goals really helps with this – when you both have a vision of what you want life to look like, it’s so motivating to work on it (and support each other in the process). We’ve been a one income family for 16 years and the main reason it’s worked so well for us is viewing all money as “our money” (and having a mutual respect for our roles).
    Amanda @ centsiblyrich recently posted…No matter what your age, now is the time to improve your financesMy Profile

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  8. Fred

    Whenever I am getting to know a person, I’d look ask questions about financial management and very specific to it. I’d like to meet a partner who has the almost the same financial goals as mine and who has financial responsibility and are goal-oriented. It’s one of my criteria and helps me have a good conversation.
    Fred recently posted…Trading the Financial MarketsMy Profile

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  9. Mustard Seed Money

    I never did get why people were willing to get married and make a life long commitment but are too afraid to talk about money before marriage. It never made any sense to me.

    I’m a big fan of creating a budget together and agreeing on what money each person can spend outside of the core expenses each month. I think being able to feel like you can spend gives a little breathing room allows us to feel a little bit selfish when we want to :)
    Mustard Seed Money recently posted…Why You Probably Need More SleepMy Profile

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    1. livingrichcheaply@gmail.com Post author

      I wonder if people are afraid to talk about it or just don’t think it’s all that important. If you’re young and in love…and likely broke or don’t have much assets I guess it’s not a priority, though it still should be. I definitely think there should be some breathing room or “fun money.” Otherwise, you’d go crazy and scrap the budgeting thing all together.

      Reply
  10. ALTCP.org

    Couples can easily beat retirement woes by discussing to work longer. Staying in the workforce for a few more years can help them save more money for a rainy day. Or they can also consider leaving the workforce together and turn their passion into a business. But first, couples should learn to hear each other out and compromise.

    Considering retiring separately is also something couples should consider. Financial-wise, retiring at different times gives couples more Social Security benefits. Staying in the workforce also means a shorter period of drawing on retirement assets.

    When buying insurance like LTC insurance, couples should consider getting a shared care policy because this can protect couples from the devastating cost of long term care later on.
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  11. Michael

    Great post, Andrew! The perspective on money is a core value. As you said, opposites attract. I was a spend thrift and my wife was saver. We got married and she took a handle on finances initially till I got my head straight. At that point, we swapped roles again, and I pretty much have been taking care of all the finances at home. She does not want to deal with it anymore :)

    We got married 15 years back and I have no recollection of what we went through during marriage counseling.
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    1. livingrichcheaply@gmail.com Post author

      Good thin you got your head straight! My wife doesn’t want to take care of the finances…and I enjoy that aspect so it works for us! Wow…15 years! We’re almost at 10 years.

      Reply

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