Before you head down the aisle, it might be helpful to consider one of the most common reasons couples fight (finances!) and how you can easily avoid that trap. Many couples, married or not, are just not comfortable discussing their financial situation with their partners. Unfortunately, when it comes to talking money, less isn’t always more. While a properly drafted premarital agreement (aka prenup) can help get some of those awkward conversations out of the way, you can never been too prepared when it comes to finances.
So, what are the most common (and easily avoidable) financial missteps that newlyweds tend to make?
#1: Not Knowing Your Partner’s “Money Story”
Money can be a sore point for many men and women that triggers childhood issues. For example, if you grew up in a house where you could “never afford” new shoes or to go out to eat, you will have a different attitude toward money (perhaps one that is more fear-based). If your partner grew up in a home where money was never an issue, he or she will likely not have those same fears or experiences of going without. Talk to you partner about where you are coming from so that his/her desire to spend does not trigger something in you, leading to a fight. Good starting off questions include: “What did you learn about money as a child? How could it be influencing your decisions now?”
#2: Keeping Financial Secrets
A little mystery in your relationship can be a good thing, but not when it comes to money. While there’s probably never a good time to tell someone you have $10,000 of credit card debt, these hidden details will come out eventually; such as when you go to apply for a mortgage or car loan.
#3: Avoiding Big—and Little—Money Talks
Bills, credit scores, student loans, savings, future goals for your money. The list of potential financial topics you and your partner could discuss are endless! While a prenup does address some of these, discussing your financial plans for the future is always a good idea, whether you have a prenup or not. It is important that you and your partner are on the same page about whether paying down your student loans are more important than an exotic vacation.
#4: Not Holding Each Other Accountable
If you and your partner have taken the brave step of discussing and creating a financial game plan, you must hold each other to it! For example, if you two agree that neither of you can make a purchase larger than a certain sum without checking with the other spouse first, stick to it. This way, nobody can splurge recklessly or impulsively and no angry fights will happen.
#5: Thinking It’s Too Early to Discuss Children
We get it! You want to enjoy being married before you even think about bringing little ones into the picture. But as having children will likely affect several important financial decisions (such as the type of home you buy, the neighborhood you choose, jobs, etc…), it can’t hurt to start talking now. After all, you may discover that you need to make some big decisions now, such as looking for a higher-paying job or moving to a less expensive area, in order to start saving up for kids.
#6: Not Acknowledging Cultural Differences
A person’s cultural upbringing can have a significant impact on how they approach money. For example, your spouse may have been raised in a culture where it’s normal to financially support immediate or even extended family. Are you comfortable with this? Avoid conflict down the road by setting your boundaries up front.
For more information on how to deal with delicate financial issues with your fiance or spouse, contact the experienced family law attorneys at Walzer & Melcher LLP today.