This is the second entry in a five part series this week on the stages of a relationship and how you can make financially sound choices throughout. Other entries include courtships, weddings, honeymoons, and marriages.
At some point in a relationship, it becomes clear that the people involved are interested in tying their lives together.
What does that mean? It means different things for everyone, but as you prepare for that major change, there are lots of opportunities to build a great foundation for the future. There are also lots of opportunities to watch money slip through your fingers – money that you will wish you had later on.
Here are ten great things to do to make your engagement a successful one – and one that doesn’t have to break the bank.
Don’t buy into the ludicrous expectations for a ring. The hype about wedding rings is in overdrive. Do not buy into it. Two or three months’ worth of salary is not a reasonable amount to spend – it can create a negative financial impact that will last for years. It can delay your ability to buy a home, reduce your ability to save for retirement in the short term, and (quite likely) put you into a debt hole that will be hard to dig out of. And, if the engagement is accepted, it’s a hole you’ll share. So, what can you do?
If you’re expecting a ring, make a concerted effort to convince your partner to spend less. Make it clear that you not only don’t expect but that you don’t want an exorbitant ring. After all, the money could be put to better use on a down payment for a home, on retirement savings, or on other things that will help you both in life.
If you’re buying a ring, be reasonable about it and share your feelings with your partner. Discuss the purchase to some extent with the person you’re considering proposing to. Find out their feelings on the subject and explain your position that a lower-cost ring will provide greater rewards in married life.
Don’t “overdo” the moment. Make your proposal simple and memorable, not something incredibly over the top. One good idea – return to the spot where you first met or re-enact your first date. This will not only mean much more than reserving a table at an overly expensive restaurant, but it’ll keep your wallet from burning up, too.
Seek pre-marriage counseling. My wife and I attended pre-marriage counseling with our pastor and it was incredibly helpful in getting us to talk about the areas where we needed to work on our relationships. If you’re getting married through a church or other house of faith, consult the religious leader there – he or she will almost always help you through this.
Start talking about your shared money situation. This is vital – so vital, in fact, that I wrote a detailed guide to those first money talks during one’s engagement. This is vital, because if you don’t start off on the same financial page with the same ideas about roles and spending and sharing resources, it will be very hard to get on that page later on. Your engagement is the perfect time to do this.
Be completely honest about your individual money situation. Now is the time to open the books and be fully honest with your partner about your true financial situation. Don’t hide anything – get started with complete honesty. Don’t hide anything, because at some point, your partner will need to know about any big debts you are sitting on or other such issues, and that problem will also be your partner’s problem. Talking about it now allows you both the time and space to figure out how to handle it – together.
Start planning long-term financial things together. If you’re considering financial choices that will have a long term impact, include your partner in the discussion. Plan out your retirement savings and your career choices together, because those money choices will affect your partner greatly in the years to come.
Talk about a pre-nupital agreement, even if it seems unnecessary. Some people firmly believe a marriage is for a lifetime. If that’s so, great – it should be very easy to draft an agreement because you’ll never have to execute it, right? Others might believe that they don’t have enough assets to worry about it – but will that be true in ten years? No matter what, a pre-nupital agreement can save you a lot of headaches later on, so talk about it now.
Talk through your problems with your partner first and foremost. Marriage is a lifelong commitment, one where you share everything with your partner. As you move towards that day, you should be talking about your problems and concerns with your partner, not hiding them away. Hiding them now or seeking others to talk to sets a poor precedent for your relationship, one that will cost you time and time again over the long run.
Got any good, reasonable, frugal advice for people who are engaged – or about to be? Please leave them in the comments.