Oran Hall | Have the money talk before you say ‘I do’

Money matters have been cited regularly as a principal cause of marital conflict and even divorce. Talking seriously about money before getting married can help a couple lay a solid foundation for a healthy, long-lasting marriage as it prepares them to draw from each other as they develop their unique family culture in the marriage relationship.

By having open and honest conversations about financial matters before they marry, couples can build trust, prevent surprises, align their goals, avoid misunderstandings, and work hand-in-hand as a strong team despite the different attitudes that they bring from their varied family cultures and personal experiences.

Considering that these are attitudes and behaviours that would have developed over a lifetime up to that point and will not change readily, there should be no illusions that there will be no differences on financial matters during the course of the marital relationship.

Having that talk over time, though, is key to creating better understanding and better decision-making.

Couples must address head-on some critical topics if they seriously want their partnership to be long-lasting, harmonious, fruitful, and fulfilling. Here are some examples: full financial disclosure, attitudes to money, financial goals and priorities, managing money as a team, and debt and credit.

Surprises at the beginning of a marriage are not good. To reduce the risk, there should be full disclosure – each partner sharing details about their assets and liabilities. Let your partner know about your savings and investments and properties, your income, your credit card debt, loans and mortgages, and credit history.

After all, you are bringing them into the marriage. Ouch! This is where trust must begin and where you must be certain that you really want a life partnership with the one you are proposing to marry. It could be embarrassing and uncomfortable, but consider the risk you may be exposing yourself to later on without this initial transparency.

In many ways, we are who we are, so attitudes to money, for example, are rooted in us and determine what we see as important. Some of these will inevitably seep through in interactions and actions prior to the serious talk sessions that should come before the ‘big day’.

Our attitudes to money are shaped by the wider society, church, school, past experiences with money, but very importantly, by our families, not to mention how we are wired! It is important to share how your family handled and related to money because of how it will influence your expectations and behaviour in marriage.

Some people are spenders; others savers. How will two spenders align with each other? Or two savers? Or a spender and a saver? How do you approach budgeting? Some people are comfortable with risk-taking; others are not. How will this affect your investment philosophy?

Financial goals and priorities must be on the agenda. What are the goals and priorities of each person for the next five, 10, and 20 years, and how can they form the basis for setting mutual goals?

Decide on how a very important short-term goal – the wedding – will be funded, whether you want to have children and the implications. Don’t shy away from long-term goals like home ownership and retirement, how to fund them and how to track their progress.

Have a meeting of the minds on how to manage money jointly. Decide if you want to have individual accounts, joint accounts, or a hybrid for savings and investment. Take a similar approach to the paying of bills, and have a clear strategy addressing debts brought into the marriage and rebuilding credit if necessary. Focus also on how to handle major purchases.

Agree on the essential (must-have) items, the important (but not essential), and the possible (may be eliminated for the sake of economy), and dealing with financial emergencies.

Consider other financial matters – insurance and your will, for example. How will getting married affect who the beneficiaries are on your life insurance policy or policies? Considering that getting married invalidates your will, how can you do a new will that reflects your new situation while protecting your other dependants, if any?

For your talk – there could be several – set aside a dedicated time and place free from distractions. Prepare yourself: write down your assets and obligations, for example, and make yourself aware of relevant issues by reading books and magazines and taking full advantages of what the media has to offer. If it becomes difficult for you and your expected to go through this exercise smoothly, it may make sense to engage a qualified financial counsellor.

By discussing financial matters early, regularly, frankly and honestly as soon as you are satisfied that you have met the person you want to spend the rest of your life with, you reduce the risk of surprises and disappointment and empower both of you to create a financial plan to help you realise your joint and personal suite of goals.

Oran A. Hall, author of Understanding Investments and principal author of The Handbook of Personal Financial Planning, offers personal financial planning advice and counsel.finviser.jm@gmail.com