Money Conversations Every Engaged Couple Should Have
/Author: Abigail Masterson
Love is a beautiful thing. It overcomes the most treacherous of obstacles and can bring a lifetime of happiness.
Money, on the other hand, can cause problems even in the best relationships. When love and money mix, it’s best to have a plan. Make sure you have these money conversations before the wedding bells ring:
How do you both spend your money?
The first step to a sound financial relationship with your partner is to understand each other’s spending habits.
When you receive your paycheck, are you the type who saves every last penny for something rewarding in the future or do you buy something immediately as a job well done?
This conversation can be difficult if money is something that makes you uneasy. Being honest with each other will help your relationship and your finances in the long run.
What financial goals do you have?
Financial goals are important to keep a relationship headed on a clear path.
While you may differ in which goals are most important, it’s best to find general buckets you want to designate your money to each month.
For many couples, paying off debt and establishing a safety net to fall back on are the highest priorities. This is the best place to start if the two of you can’t reach a definite goal to go after because it will give you incentives to continue working hard.
Eventually, you will find common goals to put your money towards.
Getting on the same page about our financial goals was a fun activity. We decided that our big goal is to become financially independent by the age of forty. We’ll definitely share our journey with you!
What are your credit scores?
A high credit score can save you hundreds of thousands of dollars over a lifetime.
Knowing what your partner’s credit score is and helping them to raise it if necessary, will be one of your highest priorities – especially if you are planning on buying a home.
There are many guides out there that help you raise your credit score and explain the factors that influence your scores. For more information, read this article about what a good credit score is.
What are your assets/liabilities?
As you both have grown into the hard-working individuals that you are, you have probably accumulated some assets, along with some debt.
Chances are, that one – if not both – of you have racked up student loans during your college careers. While it may seem far off, you should still make it a goal to understand your students loans and try to pay them off in the most efficient way.
It’s a great idea to get the full picture of your finances. When you make decisions as a couple about budgets and investments, they will be informed by your current financial foundation.
Create an agreed-upon budget
Creating and executing on a budget can be scary for people, especially if their relationship with money needs help. Budgets can make people feel restricted, but a well-executed budget is the key to freedom.
When you know where your money is going to each month – bills, entertainment, groceries – you can step into a different mindset when you spend.
If you plan to have $200 for entertainment in a month, you can confidently spend $200 on whatever you want. The idea that you should save that money is no longer in your mind because the two of you will have set aside the money, on purpose, to be used however you want.
It isn’t exactly freedom, but it is freeing to know that you can spend your money without guilt.
Decide who does what financially
When it comes down to it, couples come together to complement each other.
One person may be a great cook, the other a great cleaner. You split the chores according to each person’s skillsets and compromise where you need to.
Taking care of your finances is no different. While both of you need to agree on where your money is going, one person may manage the nuts and bolts of the finances while the other handles different tasks.
In order to alleviate some of the stress that the newly appointed ‘money manager’ may deal with, the partner can find ways to help ease their troubles.
This can be something as simple as making sure to collect the receipts after every purchase or tracking spending in an Excel sheet. That way, at the end of the month, the money manager has it easy.
However you decide to split up the tasks, do your best to come to a compromise that benefits both of you. This will help to prevent potential issues in the future.
Consider a pre-nup or post-nuptial agreement
When considering marriage, pre-nups can be a touchy subject, but they shouldn’t be.
Thinking about divorce before you get married may seem like a buzzkill, but close to 40% of all marriages end in divorce. In order to prepare yourself for the worst-case scenario, it’s best to cover your tracks from the beginning.
Few couples discuss the engagement ring and the role it may play in the prenuptial agreement. However, both parties can deliberate on this and agree to make the ring an exempted asset in the event of a divorce. Particularly when the ring is a high-priced piece from places like Aura Diamonds, a prenup agreement can settle on it being financial compensation if both of you ever go your separate ways. Such realistic conversations will help ensure you and your partner are on the same page.
If a pre-nup is a conversation you know isn’t worth having prior to your wedding day, then consider a post-nup.
Post-nuptial agreements are typically the same as pre-nups, but they happen after the marriage. Knowing about this option can help you down the road. If you experience a significant change in marriage, this can be a saving grace.
When it comes down to it, compromising with your partner to make a financial plan is a big step in committing to a lifelong journey. There will be hiccoughs along the way but having an open mind and trusting in your relationship will make these conversations easier. Marriage is a beautiful thing, don’t let it get ruined by money talks.
About the author: Abigail is a Freelance Content Writer who loves to share a great story. Originally from Colorado, Abigail grew up in a small town called Montrose and she still spends much of her free time in the mountains hiking and skiing.
