It is wedding season and couples are in the mindset of new possibilities and building on what they already know about each other’s hopes and dreams. As they progress toward common goals, every couple has a unique way of working together; A language and a rhythm unique to them. Through dating we develop an insider’s perspective on what makes our significant other tick. We know where they are coming from, where they are going, and who they are at a very deep level…on most topics. One area that is often overlooked, though, is learning the financial habits and behaviors that our partner brings to the relationship. No wonder, then, that money issues so frequently add stress to marriages.
I know first-hand what it was like to not ask the right questions up front. When I proposed to my wife, we had yet to live in the same city, so we spent hours on the phone talking about everything. Except money.
At the time, I was a First Lieutenant in the Army and my soon to be fiancé was a pharmaceutical sales rep. She thought her income was well above mine, but in fact we made the same amount. She assumed that I made so little as a junior officer that she frequently offered to pay for dinners and dates. With a standing offer to “Go Dutch”, you can see why I wasn’t too hasty to reveal that I was actually saving a good bit each month. Little did she know, that savings was going into an account to buy her an engagement ring.
When I did pop the question, we spent the afternoon calling family and sharing the good news. That night, though, the conversation took a very practical turn. We sat down after dinner and had our first financial conversation about how to save for the wedding and honeymoon. “How much do you make?” “How much do you have saved?” We did not even know the basics. The dinner bill ended up on my side of the table much more often after that.
In addition to assuming the facts about our situation, we also had assumptions about habits. For example, my fiancé had seen me swiping a card for every purchase since she met me. She asked, point blank, “How much credit card debt do you have since I see you using plastic for everything?” “None”, I said, “I use a debit card, not a credit card.” She was not familiar with the distinction and after talking it through was much more reassured about my financial responsibility.
We look back on that first night of being engaged as an important launching point for all of the financial conversations that have occurred since. Here are some hard-earned observations for the newly married or those looking to spark the financial conversation in their relationship:
- Start by putting all that you own and owe on one page. This personal balance sheet can provide clarity on where you are, before you talk about where you are going.
- Talk about priorities that are very specific and big. Decisions on career, home ownership, and lifestyle are some of the biggest you will make as a couple. Don’t wait until there is a job change, or a need to move before having conversations about what you value most.
- Set goals that have small steps. This is how the elephant is eaten. Set an emergency savings goal. Prioritize the repayment of debt. Pay yourself first. Make sure you can see victories from time to time and celebrate them. Small goals accomplished frequently will help you avoid complacency or the urge to reach for a “get rich quick” option.
- Look for ways to build habits in common. It is fine to have a division of labor when it comes to money. One of you might have a habit of managing the monthly budget while the other handles the investments. That is how our family works. It works best when you each check in on a regular basis to update one another on progress in each of your roles. Communication is the most important habit you can have.
I have worked with families that are in great need of getting their financial affairs in order and others who are super organized, but it is all run by one spouse. In both cases, a common sense of the couple’s financial health needs to be built by having conversations about money. The earlier in the relationship, the easier (maybe not on your engagement day), but it can be done at any time in your relationship. If the topic seems overwhelming, a good financial planner should serve as a listener and facilitator. Waiting to talk with a spouse about money can create stress and anxiety, while healthy dialogue about wealth can be part of the unique language and rhythm of a happy couple.