You’ve found your soulmate…congrats! If things are getting serious and you’re considering a walk down the aisle, make sure you get real about your finances first. The money talk can get uncomfortable, but your finances play a huge role in what the rest of your life looks like. Consider these facts:
- 75% of Americans experience financial stress, while nearly 25% are experiencing extreme financial stress.
- 86% of couples who married in the last five years started their marriage in debt.
- 94% of people who say they have “great” marriages discuss money and financial goals with their spouse, compared to only 45% of couples who say their marriage is “okay” or “in crisis.”
- 35% of all people experiencing relationship stress said money was the primary cause of the friction, with annoying habits coming in second at 25%.
- Nearly 60% of divorcees believe that money played some role in their breakup with another 20% citing money as a significant factor.
Put simply, money matters when it comes to matrimony. Here are some conversation starters to take the awkwardness out of “the talk” and make sure you’re on the same page before buying the ring or saying “I do.”
Discuss Life Goals First
When you first sit down for “the talk,” don’t dive straight into questions about your salaries, debts, etc. To be effective, money talks need to be comfortable and honest. Jumping the gun about your partner’s personal finances can derail the conversation quickly and feel confrontational. Instead, ease in by discussing personal life goals. This includes broad questions like:
What personal goals and aspirations do you have?
This question will reveal if your partner plans to go back to school, wants to travel a lot, relocate to another city/state and more. You can easily ask follow up questions about how they plan to achieve their goals and gain valuable insights into your partner’s money mind state.
Do you want kids?
This question opens up a plethora of other financial questions. If your partner wants kids, do they expect one person to stay home? Would they want to move to a better school district? How would you pay for the basic costs of raising a child (food, diapers, childcare, etc.)? Should you pay for the kids’ college? The list goes on. The answers to these questions can springboard into other conversations about money management and family planning.
What does your ideal retirement look like?
This is a great one to reveal whether your partner is a planner and it also uncovers their feelings towards saving, budgets, etc. If you don’t see eye-to-eye on things like traveling, being near family and the lifestyle you want to lead, discuss compromises and how you’ll fund your golden years.
How do you feel about_____?
Don’t limit yourself to the questions mentioned in this post. Make sure to think through what is important to you and come up with your own questions as well. Topics could include funding hobbies, fine dining, seasonal sports tickets, plays, etc. It’s important to know where each of you see your spending money going.
If you approach the money talk by focusing on life goals first and finances second, it can make the conversation comfortable and flow better for both you and your partner.
Digging into the Numbers
At the end of your life goals conversations, make sure you have thoroughly discussed these key points:
Salary – This may seem a little taboo to talk about, but it’s important. Having a firm understanding of your combined household income allows you to plan and budget together realistically. When you can tag team your financial goals, they’re much more likely to be achieved.
Debt – Be honest with each other on how much debt you have. This could be anything from student loans, car payments, credit card debt, housing costs, medical costs and more. When you get married, your lifestyle is affected by your combined monthly payments and your partner’s debt now becomes your own. It’s best to know what you’re getting into and make a plan to eliminate as much unnecessary debt as possible.
Assets – Assets include anything you own. This is typically real estate, retirement funds, businesses you may own and other investments. Knowing each other’s assets gives you a blueprint of what you’re walking into and your partner’s savings habits. It also clues you into your life together. For instance, if both people own homes, what happens when you decide to move in together?
If you are a young couple, there may not be much to talk about in this area, but if you’re more established, this could be a lengthy conversation.
Financial Obligations – If your soon-to-be bride or groom is paying child support, alimony or other financial obligations, make sure you have a clear picture of what that looks like and how it will affect the future of the new family you are creating.
Combining Accounts – To open joint bank accounts or keep them separate? That is the question. Some couples keep their money completely separate, some combine everything and some do a combination of the two. A recent study stated that 57% of people prefer to keep separate accounts while 43% would like to combine them. It’s important to make sure you know which side of the fence your partner is on.
Keep it Real with Yourself
After you and your partner have finished your conversations, the last step is to be honest with yourself. If you and your partner are on the same page, great! It’s the first step toward having a lasting and fulfilling financial future.
If you find that there are inconsistencies between the two of you, make sure you have serious talks about how to reach a compromise. If you can’t agree on solutions that work for both of you, then you need to take a long look at the relationship and make a choice whether it’s the right time to get married.
Marriage can be a wonderful thing when partners work as teammates, but it can get ugly quick when values, wants, needs or desires don’t align. Money is the number one reason couples argue and the second biggest reason they divorce. Talking money isn’t always easy, but if you put in the time and effort to talk about it, your chances of having a successful marriage increase exponentially.
Have you had “the talk” yet? How did it go? What questions did you ask? We want to know!