Getting married is such a wonderful milestone and it can lead to many new opportunities. One of these opportunities could be building life goals together. As discussions around what you both want out of life begin, inevitably finances come up. The truth is money can be a point of conflict in marriages when there is no plan. If you start early with these conversations, many difficulties, and hiccups are avoidable. Here are a few tips to get started.
Say your financial goals
These goals could be around children, home buying, continuing education, career, vacations, and even retirement. Dive deeper into each one of your goals with what they would be in an “ideal” world situation. For example, don’t only say you want to buy a house but include what kind of house you want to buy and the location. The purpose behind this is that as you outline your joint financial goals, you build a foundation for spending/saving. One of the most important goals you can set as a couple is emergency savings. This is because once you knock out emergency savings you can focus on larger goals without the worry of a setback. One major setback is the death of a spouse, while this conversation isn't fun, you need to include it. A lot of financial goals may rely on two incomes, and a life insurance policy ensures you contribute your share.
Views on Money
Each person has different perceptions and views on money and the importance of it in your life. Here, the idea is to ask questions such as; how did your parents handle money growing up, how did you manage money until now, what is your investment philosophy, and how do you view debt? You may find that your partner is a little tight or spends too freely. It is very common for couples to have differing views on spending/saving that stem from the experiences they have lived through. The purpose of this is to understand your spouse so that future conversations have a positive shape.
Chris Hogan surveyed 10,000 millionaires and found 93% of them use a budget, and stick to it. Figuring out a budget does not need to be hard, there are many articles and apps out there that make it easy. Recently, I’ve been using MINT because I can link all my accounts, it sets weekly limits, and shows previous months’ habits. Budgets are not permanent and regular evaluation happens throughout the marriage. So, there is no need to have them be perfect now.
During this conversation, you may want to decide how handling financial management such as bill payments will work in your household. There is no right or wrong way to do this, but make sure if one person handles the finances then the other person stays in the loop. Remember that it is important to create an action plan to decide what happens when you are off budget. Make sure conversations about money are judgment-free and don’t put emotional values on each other’s behavior.
These tips are meant to get the ball rolling, how you implement them is completely up to you. Finance can be a difficult topic to discuss because emotions and self-worth are attached, so having your conversations earlier will make future discussions easier.