Getting engaged marks one of the happiest occasions in a person’s life. You’ve found that special person, the person who you want to spend the rest of your life with, the person who you want to share everything with… including financial expenses… and debts… and liabilities.
While this may seem mildly terrifying at first, don’t let it put a damper on the thought of building a beautiful life with your partner! Much like many obstacles couples come up against, financial stress can be worked through using open and honest communication.
The first step to financial literacy in your marriage is disclosing your full financial circumstances. Lay it all out on the line with total honesty so each partner knows what they are getting into. This includes both liabilities and assets. You can even go as far as obtaining your credit reports and credit scores so there are no hidden surprises. Once you’ve gathered your financial info, you can sit down and discuss each other’s balance sheets.
Once you have established where the two of you are at with your finances individually, the next step is to decide where you want to go with your finances together. A good way to do this is to set joint financial goals. Start with making a household budget and then delve deeper. Take into account your needs, wants, and goals. Even if you don’t know exactly where you want to be in ten years, at least this will help to evaluate where you and your partner stand currently and what needs to be discussed more.
Some good questions to ask are:
- What is your attitude towards saving vs. spending? If your outlooks differ, how will you manage that?
- What are your top priorities and what financial resources come into play with those priorities?
- What are your long-term career prospects and goals?
- Do you see yourself seeking out additional education or other enrichment that may require time off from the workforce?
- Do either of you have children from a previous marriage or do you plan on having children in the future? If so, will one spouse need to stay at home part or full time?
- Do you anticipate the need to take on financial responsibility for an aging parent or relative?
- What age do you plan on retiring? What does retirement look like for you?
You and your partner may not be in the in the same stages of your career or even in the same tax bracket and that is okay! If there is a huge discrepancy in personal assets, a prenuptial agreement may even be in order. Not all couples mingle their finances; some people prefer the independence of managing their own finances.
Ultimately, with respect and open communication, talking about money with your soon to be wedded husband or wife, doesn’t have to be a big deal. Getting the conversation out of the way in the early stages of your engagement ensures you will start things on the right foot and make future financial conversations happen a little more naturally. If you can commit to sharing a bathroom till death do you part, you can talk to your spouse about a budget!