Honey, I have something to tell you…The conversation you should have before you tie the knot.
People are always talking about money: what they paid for their latest toy, how much they saved on their last shopping expedition, how expensive life is. And while the money chatter really ratchets up as couples plan for their weddings, the focus tends to be on The Big Day and not on what comes next.
While the wedding itself is exciting and challenging, it doesn’t hold a candle to what it’s going to be like sharing a life. If you haven’t had the money heart-to-heart, you’re begging for a fight down the road. When questions about financial goals, money values and debt start cropping up, so can the conflict. Better to get it all out in the open so you know what you’re getting into.
Who Will Pay for What?
You might think that splitting the bills 50/50 is the fair thing to do. He might think you should just pool all your money in one account and pay for everything together. So what’s it going to be? If you don’t iron out how you will manage your cash flow on day-to-day basis, you’ll likely end up with multiple accounts, struggles over who should pay for what, and resentment about how the other guy spends your money. Ask each other:
- Who will do the day-to-day money management?
- How will the other partner participate? (Abdication should not be an option.)
- How will we deal with unexpected expenses?
- Do we each want “our own money” that we don’t have to answer for? How much?
- How will we decide on major purchases?
What Are You Bringing to the Table?
Couples hook up all the time without talking about how much money they have or how much debt they’re carrying only to face the horror of the other person’s past financial indiscretions. While one partner is not responsible for the other’s debt unless that person borrows jointly or co-signs, old debt has a way of haunting new relationships. If one of you has been lax in your repayment history, it’ll cost you both more to borrow when it comes time to get a mortgage. If one of you has racked up dozens of credit cards and is barely making the minimum payments, it’ll cost you both when it comes to achieve the goals you’ve set together. Ask each other:
- How much do we have in the bank? In retirement savings? In other assets?
- How much do we have in debt? What are we paying for that debt (in terms of interest cost and cash flow)? And how do we plan to deal with that debt moving forward?
- How much do we each earn (in net dollars)? What benefits do we have from work? Whose job will take priority if we have to move for a career opportunity?
- Do you have any insurance through work or bought privately? Who is it with? What’s it for (life, disability, medical, critical illness)? What’s the insurance benefit? Who is the beneficiary? Will you be changing the beneficiary once you marry?
- Do you own a car (or other vehicle)? How old is it? When will you likely need to replace it?
- What other financial responsibilities do we each have (e.g., supporting a family member, child support or spousal support, aging parents, needy siblings)?
What Do You Want?
Speaking of goals, do you have any? Have you talked about them? Do they mesh or conflict? If you have chatted about when you’d like to buy a home, how many kids you’ll have and who will care for them, and how often you should take a vacation, these are but a few of the hundreds of things you still have to cover. Don’t get overwhelmed… you don’t have to do it all at once. But it does mean you have to make your goals – and your money – a regular topic of conversation. Ask each other:
- What does our life together look like in a year? Five years? Ten years?
- How are we the same with our money?
- How are we different with our money?
- How will we negotiate so we keep things fair?
- Who will we ask to help us with our financial planning? (Parents, friends, professionals)
As you move from Me to We, do your relationship a favour and make communication a top priority. No matter how well paired you seem at first, as time goes by and you each change, you won’t be the people you were when you married. So communicate, don’t disintegrate.
7 Steps to Set The Stage
- Choose a non-stressful time to talk.
- Listen to each other with patience and respect.
- Be honest.
- Share concerns without judging your partner.
- Make your partner feel safe.
- Take a break if emotions start to run high… but
- Set up the time for the next money talk before you’re done.
Gail Vaz-Oxlade is the host of the award winning “Til Debt Do Us Part” on Slice and Global TV in Canada and CNBC TV in the U.S. Gail is currently in production on a second reality series called Princess which will air on Slice in the fall of 2010. Gail blogs daily at her website, www.gailvazoxlade.com, where she urges readers to take control of their money and their lives. Sought after by the media for her quick wit and blunt honesty, Gail has appeared in pictures and print all across Canada. The author of 12 books on money, her latest book, Debt Free Forever is published by HarperCollins Canada.