Finances are the least exciting of all the things to discuss before marriage. Yet, statistically, money is the top reason couples argue, and financial arguments are among the top predictors of divorce. So, don't let financial stress end your marital bliss.
How can you avoid becoming a statistic? Here are some ideas from the experts:
A 2013 National Foundation for Credit Counseling poll found that 68% of engaged couples have negative attitudes about discussing money. To 45%, it's "necessary but awkward," and 7% say it's "likely to lead to a fight." Five percent predict it would call off the wedding.
The result? Couples don't talk about finances. A Fidelity survey found that over one-third don't know their partner's salary, of which 72% think they communicate "very well" about finances.
What's romantic about debt, budgets, or taxes? Nobody can ensure newlywed happiness, but experts agree: Don't wait.
Discuss taxes now. The "marriage penalty" may cost you more; consider marrying in January. But if one spouse earns the majority, you'll enjoy a "marriage bonus," and a December wedding might be wise.
Talking about money now is important, but so is how. SmartMoney found that over 70% of couples talk about money weekly. The problem? "Most of us don't know how to talk about money," says Mary Claire Allvine, certified financial planner. "People tend to be emotional and reactive, not strategic."
Whether you talk money weekly or monthly, agree on a system and stay open to change.
Start easy: "What's your first money memory?" Then, "How did you spend your allowance?" Then, go further:
"Are you a spender or saver?" If one saves and one spends, create a budget considering both styles. Studies show that men and women spend differently. Women tackle daily expenses (groceries, utilities, clothes); men make larger purchases (TVs, cars, computers). Amounts might be equal, but perceptions differ. About 36% of partners don't discuss big purchases; that's a recipe for disaster.
"Are you in debt?" Your spouse's debt doesn't become yours but affects your choices. Heavy credit card debt complicates home buying. Make reducing debt a priority. A TD Ameritrade survey found 38% of partners unaware of the other's debts. "What are your financial goals?" "Where do you want to be in five or 20 years?" Goal-oriented people progress toward savings and investing targets faster. Decide on the targets: buying a home, starting a family, being debt-free. List your goals, then share and plan together.
Know what's important to each other: things or experiences? A house or saving for retirement? Clarify these values early on in the marriage.
A Money survey revealed that those who trust their partner with finances feel more secure and argue less. But, unfortunately, that trust isn't typical among newlyweds. "We're intimate with our partners in so many ways before marriage, and yet money remains off the table," says Paula Levy, marriage therapist.
Be honest. If you made a foolish purchase, own up to it. Some 40% of partners have lied about the price of a purchase. Lying about money has enormous repercussions.
Support one another; finger-pointing or retreating won't help. Instead, work together on a plan.
Celebrate differences. Your bargain-hunter should spend money while you invest in savings. Choose a monthly amount each can spend, no questions asked. According to Money, the average amount couples say this should be is $150.
A joint bank account has pros and cons. SmartMoney found that 64% of couples put all their money in joint accounts; 14% kept everything separate. Many newlyweds choose both: yours, mine, and ours. Calculate shared living expenses and then contribute your portion of those costs.
If money conversations are challenging, hire a professional or seek free counseling. Elevate Credit Union can help. We have a great free budget counselor to help keep your financial future on track. Find out more at Elevate's Free Budget Counseling. And act now to ensure money won't prevent your marital bliss.
Don't let financial stress end marital bliss; with these tips and tools, you can find your financial marriage bliss.