Spring is here and that means one thing, it’s wedding season! I have a few weddings to attend this summer and it always takes me back to my own wedding and the first few months following it. I remember when we first got married; Marc and I would walk hand in hand to our mail box which was brimming with gifts, cards and gift cards. Going to the mailbox was the best part of our day. I remember very vividly the day we walked to the mailbox and found nothing but bills. It was a harsh wakeup call and a reminder that money issues don’t go away when you get married, in fact getting married can make money problems a whole lot worse. By having these money conversations before saying “I do” you can help save yourself a lot of heartache and frustration in the future.
1. Come clean about your current debt and credit score
It’s very important to be honest about how much debt you are currently carrying, even if it’s a large number. You will need to have realistic goals when setting a budget and you won’t want any unexpected surprises when you go to buy a house or rent a place together.
2. Are you a spender or a saver?
Some people get extra money and like to immediately spend it; others prefer to hoard cash. There is no right or wrong answer, just make sure you have a good understanding of which style your significant other falls into. This can cause unending frustration down the line so it’s best to be prepared and try to work through future conflicts now. Also, don’t assume you know which category your fiancé falls into, you might be surprised.
3. What do you enjoy spending extra money on?
Maybe it’s manicures and lattes or running shoes and workout clothes. Maybe your fiancé needs every new video game or prefers going to the movie theatre every weekend. Whatever your personal vice is, make sure you discuss it with your future spouse. Decide how you are going to handle discretionary purchases. Will you each get an “allowance” to buy indulgences with? Will you each keep a personal bank account? Whatever you decide to do, make a plan now before you wake up one morning to an overdrawn checking account.
4. Are you going to combine bank accounts or keep your money separate?
Most couples decide to open a joint bank account soon after marriage and merge all of their finances together, though there are some couples who feel more comfortable keeping their finances separate. If you are going to keep separate accounts, decide now how you are going to split the household expenses. If you decide to merge your finances, discuss who is going to be the lead money person. Who is responsible for paying the bills and keeping track of spending? Also, talk about your money expectations. Do you pay your bills the moment they arrive or prefer to wait till the deadline? Etc.
5. Discuss budgeting expectations
You are probably used to your own money management style by now and it can be hard to get used to your fiancés way of doing things. By discussing your expectations up front, you can manage those expectations together. A few questions to bring up:
a. How much spending money do you expect us each to have?
b. How much do you normally spend on family/friends birthday or Christmas presents?
c. How much will we contribute to our savings or retirement accounts?
d. What kind of vacations do you see us taking?
e. How often do you like to eat out?
Bringing up these conversations before the wedding will help avoid headaches in the future and keep your finances on track.
Serenity Melnick is a Registered Representative offering securities through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Legacy Wealth Management, LLC and Cambridge are not affiliated. Cambridge does not offer tax advice.
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