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?