Think money isn’t a romantic subject? It can be. After all, consider what can happen to the love when you don’t come together on vital financial issues. Confusion, anger, resentment–even divorce can take its place. Here are my top eight topics to tackle and resolve before saying “I do.”
1. Your financial and lifestyle dreams: You may want to save for penthouse living and a home in the Hamptons, but your partner could be aspiring for a more austere existence. Discuss what each of you wants to do with the money you make and accumulate together. This information will be integral to avoiding serious conflict later.
2. How much debt is acceptable: Some people feel comfortable owing $100,000; others are seized with anxiety when they’re $100 in the hole. Ask your betrothed if he or she owes any money now (you may want to pull and share credit reports–I actually recommend it), and talk about everything from repayment plans to when you feel it’s right to charge and roll the balance over. Then come up with credit rules you can both accept.
3. Who will be the risk-taker: If you’ll be stepping into the market, know which of you is OK with more and less risk. A promising but volatile start-up can sound like a great investment to you, but your spouse may only be able to handle super safe bonds. There is a point at which everyone stops feeling at ease with potentially losing savings in pursuit of a return. Know what it is and make it your benchmark.
4. Whether you want combined or separate accounts: Marriage doesn’t automatically mean that you must be joined at the financial hip. How to set up and maintain your accounts is entirely your choice. Discuss why you might want to merge or remain independent and make a decision. There are no right or wrong opinions here, so leave your emotions at the door and remain practical.
5. Kids on the horizon? “Work” out the details: Not everyone wants to be a stay-at-home parent, but many do. Begin the dialogue. You and/or your spouse may have extremely strong value-driven opinions on the subject, so do not leave this talk until after you tie the knot. If one of you will be quitting your job, start saving and make sure you can afford to live on one income before you really do it.
6. If you believe in paying for college: There are countless more kid-related money chats to have, but another good one to hold before starting a family is whether or not you believe in footing the college bill. You’ll talk more at length about it when you actually have the child, but addressing it beforehand can give valuable insight to your unique priorities.
7. How much transparency you want: Are you going to share and get approval for every transaction and believe your spouse should do the same? That’s fine, but get those expectations on the table. While secrets are no good, no one wants to live under a microscope. Determine when each of you should run a purchase by the other.
8. Which of you will be the money manager: Bills will come in and will need to get paid, so discuss who is going to take on this task. It should be the person who both possesses the greatest attention to detail and actually enjoys the process. Mind though, even non-active partners ought to be involved periodically, especially when your financial status changes.
Oh, and don’t attempt to cover these topics all at once. One per week is great. Pour a glass of wine or a cup of tea and have fun with it. You’re preparing for a prosperous future together–Salut!