Discussing Money Before Marriage
Ben came from a wealthy family. It was his experience that when you ran out of something like milk or ketchup, more of it would simply appear. Abby, on the other hand, came from a single parent family. When they ran out of something, it was gone, and so Abby learned how to make things last.
This summer, Ben and Abby are getting married, but first, they need to talk about money. Abby is a saver whereas Ben is a spender. Abby gets nervous when Ben buys stuff and Ben thinks Abby should loosen up.
This is why money is the subject that couples fight about most, because how we think about money has everything to do with how we handle our money.
Conversation #1 How Do You Think About Money?
It’s not uncommon for couples like Ben and Abby to have very different views on money. Take a look at how each of you talk and think.
Does money grow on trees? Is there never enough? Do you feel entitled to things?
How you think about money often has nothing at all to do with the dollars and cents. You are really talking about what makes you feel safe, secure and cared for. Seek to understand where your partner is coming from before you try to make any changes.
Conversation #2 What Do The Numbers Look Like?
Many couples make the mistake of trying to follow a budget before they’ve figured out what they have to work with. The first step to financial success is the creation of two important financial documents: the income statement and balance sheet. These two statements together show your cash flow.
Your Income Statement: What are your sources of income? Do you and your partner receive regular paychecks? Rental income? Child support from a previous marriage? List it all out.
Your Balance Sheet: How much do you owe and what do you own? Divide a sheet of paper into two halves and list out your debts next to belongings such as homes, cars and investments.
Your Cash Flow: How much money is going out every month? List out your bills and calculate your discretionary spending – those items such as presents and dinner night. Your expenses (going out) as compared with your income (coming in) reveals your cash flow.
Conversation #3 What Do We Want?
Now that you have a clear picture of where you are, ask each other, where would you like to go? What are your financial goals? Are they the same as your partner?
Talk about a 1 year and a 5 year goal. Your budget is the tool you create together to get you from where you are now to where you want to be.
For example, if you’d both like to own a home in 5 years, one of you might focus on putting in over-time to increase income. The other might focus on paying down debt.
Conversation #4 What Are The Risks?
Your chances of success increase by the amount of risk you are able to decrease. Take a look at the areas where you are vulnerable. Do you have credit card debt with high interest rates? Poor life insurance? No umbrella liability in place? Identify the weak areas and map out the steps you will each take to address those areas.
Conversation #5 – Do You Have Final Wishes?
This is not an easy subject to bring up, but death is unavoidable. Marriage unites lives, and this includes money, documents, and financial investments. If something were to happen to one of you, would the other know what to do? Who to contact? The names and location of investment accounts? Talking about your spouse’s final wishes now will give you both peace of mind about your future. You both want to do right by each other.
Have these money conversations now, before the problems show up. Make a night of it, bring out your favorite beverage or plan a nice meal. Setting aside the time to ask and answer the hard questions now is an investment in the RichLife you are building together and the future you both deserve.
About Beau Henderson
Beau Henderson is the Bestselling Author of several books including The RichLife: Ten Investments for True Wealth, The Roadmap to a RichLife, The 5 Thieves That Will Steal Your RichLife, The RichLife Stewardship Principle and Masterful Communication For Success With Business and Life with Dr. Bill Lampton. He holds a degree in Psychology from the University of Georgia as well as the designations of Retirement Income Certified Planner, National Social Security Advisor, Certified Long-Term Care, Master Certified Success Coach and Certified Master Behavioral Analyst, in addition to his role as CEO of The RichLife Advisors. As a media contributor, Beau’s message of the RichLife has been featured in media outlets including Fox, The Huffington Post, Wall Street Journal, Reuters, CNBC, and MarketWatch.
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