I adore my wife – she’s a wonderful woman and a wonderful mother. We go together like two peas in a pod on most things, except for money (and cats, but that’s entirely off topic). We’re both frugal, but she’s never been into any sort of financial planning at all, and this has led to many, many strange and sometimes uncomfortable discussions, and because we didn’t sit down and hash out basic financial things before we got married, there have been a stream of uncomfortable financial issues that have cropped up during our marriage that led to nothing but confusion and disappointment because we weren’t on the same page to begin with.
If you’re about to get married, I would strongly encourage you to take a few hours and discuss these ten questions with your spouse-to-be, just so you know what’s going on.
How much money do we have? What’s in all of your accounts? Hint: if you’re hiding things here, then it doesn’t speak well for the level of trust that will be in your marriage.
How much debt do we have? This needs to be completely honest, with all cards on the table, or else you’re just begging for a big fight after you get married. You will be much, much better off if you both reveal your complete, true financial state, because if you do not, you’re hiding a major skeleton in the closet that will someday jump out and really, really disrupt the tranquility of your life.
How much income can we expect? What do you both make in a year? Will that grow in the future? How steady is your employment? Will there be enough money to pay for the standard of living that we’re envisioning together, or will we have to make an adjustment?
What are our known and required expenses? You’ll find yourself saving money on most of these things when you get married, but you need to touch base on all expenses. Perhaps one of you has alimony payments, or else has several maintenance prescriptions that need to be kept up. These financial requirements are important and need to be specified right off the bat so that both parties know what’s required and you don’t have an argument about them later on.
How much do we frivolously spend each month? If you’ve been burning through money to put on the impression of being wealthy to impress him or her, you need to come clean about this now. If you’re a shoe addict, or have a thing for your DVD collection, be honest about the cash you’re burning on these pet projects, but also be realistic about how much you’re going to cut down (if at all) when you get married. If this will cause problems, it’s best to talk them out before the marriage than after.
Should we use an allowance system for frivolous spending? You need to specify how you’re each going to be realistic and fair about frivolous spending. It’s not healthy for any marriage for one person to spend like crazy while the other one doesn’t have a dime, and it’s also not healthy for both people to spend a certain amount, but one person “spends” more with the help of a credit card.
Will we combine our money? For most couples (but far from all couples), combining your money is the best choice. Many argue that not doing so indicates a lack of trust between the two sides, but there may be reasons for keeping them separate. Talk about this in detail and plan for the best move for you.
If combined, who will be the primary money wrangler? In most marriages, one member handles most of the financial decisions. Be clear on who that is going to be so that you aren’t caught in situations where you’re both making moves and the right hand doesn’t know what the left hand is doing. Who’s going to make sure the bills get paid and also keep track of the money that needs to be in each account?
How will we combine our physical assets? Figure out what items you’re going to keep after marriage and figure out a fair way to get rid of the excess so no one is upset with anything. I recently heard about a wedding where both people had houses before marriage, but in the month before the wedding, one of them sold their house and went on an $15,000 shopping spree. From what I hear, the “honeymoon” period was quite short in that one.
When we marry, what will happen to our estate? Obviously, in the event of one of you passing, all assets should go to the other, but what if you’re married and you both pass on? If you’re about to marry someone that just assumes that everything will go to her niece, then you may want to clarify things before you even jump in.
Trust is the key to any marriage, and money can be one of the hardest parts to build trust on. Take the time to do it right.