Moving from Me, LLC, to We, Inc.

Talking Money Matters Before the Wedding

You might know your intended’s shoe size and favorite food and film. You may even know some family secrets. You communicate, trust and care for each other. But do you know your soul mate’s credit score, spending habits and attitudes toward saving money? Do you know your prospective spouse’s financial goals and dreams?

If the answer is “no,” don’t be alarmed. While many couples share some of their most intimate thoughts, and dot all the i’s and cross the t’s when it comes to wedding details, many fail to communicate about one of the most important topics that can make or break any loving relationship: FINANCES.

Financial Harmony Leads to Marital Bliss
“It may not sound very romantic, but worry and confusion about money can strain any relationship. By tackling money matters before walking down the aisle, you will have taken a significant step on your journey toward financial and family harmony,” said Diane Boyer, Budget & Credit Team Leader, Affinity Federal Credit Union.

While there is no “one-size-fits-all” system that works, one thing is certain: communication is the key. Money can be an emotional issue. When discussing finances with your partner, it’s extremely important to be nonjudgmental and honest. And that means being honest with yourself, as well.

Here are four tips to help you move from Me, LLC, to We, Inc.

Step ONE: Let the Numbers Do the Talking
Exchanging copies of important documents can provide a springboard for discussions about saving and managing money. Some of the documents Diane suggests are:

• Credit Reports — disclose an accurate history of triumphs, mistakes and habits
• Tax Returns — disclose income
• Statements of Net Worth — a snapshot of the value of your financial holdings that can be created by listing all your assets and subtracting your liabilities

Talking Points:

• What income is coming in? How will you manage any differences in income? (For example, if one person is the sole bread winner or makes considerably more than the other, will he/she have the final say in financial decisions or will you decide together?)
• Are there outstanding debts that need to be cleaned up? How will that be accomplished?
• Will you commingle your finances or keep them separate?
• Will one or both of you tackle the chores of paying bills and managing finances?
• Should you have separate credit cards or joint?
• If it’s a second marriage, or if there are substantial assets, is a prenuptial agreement necessary?

Step TWO: Discuss Goals and Dreams
Once you know the numbers, dig a little deeper. Explore each other’s “financial personality” by revealing your goals and dreams. One way to get the conversation started is to discuss how your parents handled money matters, and express your likes and dislikes about their system.

Talking Points:

• Do you consider yourself a spender or a saver?
• What are your financial expectations, goals and dreams? Do you seek financial security? Do you want to own a home? Retire early? Save for a future child’s education?
• Will you require a budget to prioritize and reach certain goals?
• What are your attitudes toward debt?

Step THREE: Consider Technology
Fortunately, today’s couples have a resource their parents never had: technology. Online banking, automatic bill pay and money management systems take much of the mystery and drudgery out of financial chores. Use these tools together to help you decide on a plan and stick to it.

Step FOUR: Communicate Regularly
Of course, technology won’t replace the initial conversation and the many future talks that will follow during life’s twists and turns. Communicating openly and regularly can put you on track toward effective money management, as well as make your relationship much richer in many other ways.


Sources:
“Common Sense Conversations for Couples,” Copyright 2009 Tim Michum
The New York Times, “Money Talks to Have Before Marriage,” 10/23/2009
Findlaw.com

Article courtesy of the Affinity Federal Credit Union from their quarterly magazine, Affinity Connections. For more information about Affinity or to view Affinity Connections in its entirety, visit www.affinityfcu.org/ connections.