Add money conversations to your list of pre-wedding activities.
Money can be a leading cause of stress in a marriage. To ensure the likelihood of long-term relationship success, speak openly and often about finances, says Paige Christenberry, Senior Vice President and Wealth Advisor for Regions Private Wealth Management in Knoxville, Tennessee.
“If you’re getting married, the best time to have a serious conversation about money is before the marriage begins,” she says. For wealthy young women, this conversation not only is about where you and your partner stand financially, it’s also about protecting your wealth.
Christenberry suggests including these five topics as part of your marriage and finances conversations:
1. Current Financial Situation
First, talk about what your current financial situations are. Do either or both of you have debt that will affect how much you are able to spend or save as a couple? Is one of you willing to contribute more toward the down payment on your first house as a couple, because you have assets that you do not mind liquidating? You will want to determine what your monthly expenses will be as a couple and whether you will split the bills down the middle or someone will be responsible for a larger portion and/or particular bills.
2. Individual Money Styles
Then, talk about your individual money styles. “Are you a spender or a saver? Are you a planner with long-term goals, or are you an ostrich who sticks its head in the sand and hopes for the best? Oftentimes a marriage will have one spender and one saver,” Christenberry says.
It’s OK if one spouse is a spender and the other a saver, but “you need to know this going into the marriage so you know what to expect and how to plan accordingly,” she says.
3. Who Will Pay Monthly Bills
Next, decide who will be responsible for the actual task of paying monthly bills. Tempers can flare when a payment is late because one person thought the other person paid it.
“That person may take care of the monthly expenses, but it doesn’t mean they’re in charge of all financial decisions,” Christenberry says. “You both need to discuss and collaborate on the big expenses.”
4. Future Financial Goals
Discuss their future goals, including paying off debt, buying a house, and having children. Then meet with a wealth advisor to start investing for these goals.
Retirement goals are especially important to discuss. “When it comes to retirement, I see a lot of couples who have polar opposite styles when it comes to investing. Men tend to be bigger risk takers; women more conservative,” Christenberry says. “A financial advisor will help you find common ground and determine the appropriate level of risk for the lifestyle and goals you want to attain.”
5. Separate or Joint Accounts
Discuss which, if any, accounts you’ll keep separate. Wealthy women may want to keep accounts and assets in their own name and retain full ownership rights. “Once you co-mingle any money into joint funds, state law may dictate that they become marital property and will have to be shared should you divorce,” Christenberry says.
For instance, if you receive an inheritance or a monetary gift while you’re married and deposit it into a joint account, that’s probably marital property in most states. If your spouse deposits his or her paycheck into your joint checking account, the same is true.
Christenberry says that many couples keep separate accounts in addition to a joint account, which they use strictly to pay shared household expenses. “All couples need to figure out what works best for them,” she says.
Her favorite piece of advice for new couples: Be honest.
“Honesty about money before and during the marriage is paramount,” she says. “Don’t hide anything, put it all out on the table, and then don’t be judgmental with each other.”
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