If you’re planning to get married soon, you’ve probably already asked each other lots of questions about where you’ll live, whether you’ll have kids, if you want to travel and more. These are exciting discussions that help you plan your future together; discussions full of possibilities and personal dreams.
But often, there’s one subject that’s hard to bring up: money. Talking about money makes most people uncomfortable. Of course, we usually need money to make those very dreams come true, but often when we fall in love we prefer to focus on the emotional rather than the practical.
I understand that. But to me, how we feel about money, how we deal with it — or avoid dealing with it — is very emotional. And revealing. For that reason, any couple building their life together is well advised to add some money questions into the mix before they head down the aisle. So as my wedding gift to all the couples soon to say “I do,” here are 12 questions I hope you’ll ask each other now. On the surface they’re about money, but underneath they’re about much more.
What you own — your assets — may be as simple as your bank account and car, or as complex as a home and multiple investments. But no matter how little or how much you have, it’s important for each partner to know what the other owns. When you marry, you don’t have to share all of your assets; you can choose to keep them separate. But put everything on the table. If there are no secrets now, there’ll be no surprises later.
Just like assets, debts (liabilities) you bring into a marriage are yours alone (unless your new spouse agrees to share responsibility). But how much debt you have can say a lot about your financial responsibility. For example, a lot of credit card debt can be a red flag. And even though you’re not legally responsible for the debt that the other person had before marriage, too much debt can be a financial drain on the debt holder — and an emotional burden for both of you. Be as honest about your liabilities as you are about your assets. Then you can decide how to handle them, together or separately.
For some people, spending money is an emotional high. For others, it can cause anxiety. You don’t have to feel the same, but it’s important to understand each other’s spending attitudes. It’s equally important to discuss how you’ll handle future purchases, especially big-ticket items. Will you agree on them beforehand? Share the cost? Splurging on a personal item now and then isn’t the issue. But freely spending without clueing each other in could definitely cause problems.
Just like some people are spenders, others are savers. Saving is easy for them and makes them feel secure. Non-savers can always find something else to do with the money. Again, you don’t have to be the same, but discussing mutual savings goals and agreeing on a timeline for reaching them will make it easier to decide how much to save.
The good thing about goals is that you can save for several at once. The house might be long-term, the car mid-term, and the vacation short-term. Do you agree on which is most important and how to divvy up your savings dollars?
If either of you uses a credit card without thinking, now’s the time to talk about it. Better yet, run a few scenarios together on a cost-of-debt calculator to see just what credit cards can cost over time. Then decide how you’ll handle credit as a couple.
Paying bills on time is part of being financially responsible. As you look at practical considerations such as who’s going to pay for what or who will be in charge of paying the monthlies, you want to be sure that you’re each willing — and able — to live up to your commitments.
This is a subtle way to bring up budgeting and living within your means. If either of you is always in the red at the end of the month, it’s time to seriously review your needs and wants and see where you may have to make compromises so one of you isn’t always covering for the other.
In many couples, one person will take the financial lead. But even if one of you is more knowledgeable and comfortable with money and investing, it’s essential that both of you have at least a baseline knowledge of your economic situation and share in any important decisions. Neither of you should have sole control of the purse strings.
Although you’ll be sharing financial responsibilities, I believe it’s good to maintain a certain amount of financial independence. One way to accomplish this is to have separate accounts for personal expenses and a joint account for shared expenses. How much you keep separate and how much you each contribute to the joint account is up to you as a couple. There’s no right or wrong way to do this, but you should agree on what’s fair.
Even if you’re very young, retirement should be part of your plan. It may seem a long way off, but how you approach retirement saving now will affect how secure you’ll feel in the future. Also, the earlier you start, the less you’ll need to save.
Being rich means different things to different people. For some, it’s accumulating a certain dollar amount. For others, it means having health and positive relationships. How are you each motivated by money? For instance, does one of you aim to climb the corporate ladder or launch a new business? Is one of you content with a slower, simpler approach? I think this might be the most revealing question of all because it gets to the heart of your feelings about money and your values. And these values will ultimately affect all your money decisions, from the day-to-day to long-term planning.
Money is notorious for causing marital problems. I think that’s because money brings up lots of emotions. So don’t shy away. Ask — and answer — these questions now so you can approach your financial future hand-in-hand.•
Carrie Schwab-Pomerantz, Certified Financial Planner, is president of the Charles Schwab Foundation and author of “The Charles Schwab Guide to Finances After Fifty.” You can email Carrie at firstname.lastname@example.org. The opinions expressed in this column are those of the author.
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