As someone who is preparing to tie the knot in just a few short months, I understand the excitement of dreaming about the future with my partner – where we’ll live, what cars we’ll drive, how many kids we’ll have, and where we’ll vacation. But dreaming is all fun and games until you begin trying to figure out how you’ll pay for it all. The reality is money will be the driver to most of our major life decisions together and if we’re not willing to have a candid, open discussion about it we’re already setting ourselves up for failure.
But where do we begin? Here are a few helpful hints to guide your conversation.
Step One – Where You Came From
The first step in outlining where you’re going is to understand where you’re coming from. Sit down with your partner and talk about your financial background. What are your attitudes about money? What did your parents teach you about spending, saving and giving?
Step Two – The Big Picture
Before proceeding with a plan for your finances you need to ensure that you and your partner are on the same page with where you’d like to go. To set the stage, think about these three heavy hitters:
- Life goals: Have debt to pay off? That’ll cost money. Want to have children? That’ll cost money, too. Whether you’re planning for the short term or 10 years from now, you’re going to need a plan. The earlier you begin talking about your vision for the future, the more likely you are to achieve it.
- Financial priorities: Combining incomes does not mean you suddenly have enough money to buy those Gucci shoes you’ve been eyeing for years but couldn’t afford on your own. Identify your needs and your wants and list them in order of priority. NOTE: Try drafting these lists independently and compare your list with your partner’s to identify potential conflicts before they arise.
- Retirement: Moving from a one-income family to a two-income family does not entitle you to change your routine savings. Carefully consider when and where you and your partner want to retire and how much it will take to get there. In doing so, you’ll have an end goal from which financial decisions are made.
Step Three – The Facts
At this point in the conversation it is time to get honest about where you’re at. Whether you’ve got credit card debt, student loans, or outstanding medical bills, it’s time to share this with your partner so he/she knows what’s in your name in case something happens to you. Some essentials to cover include debt, savings accounts, and beneficiaries.
Failure to talk about your finances with your future spouse could be one of the biggest mistakes you’ll make. Take the time to have honest financial conversations early – it can only increase your chances of a long and healthy marriage.
By Abby McNamara, Prosperity Connection Staff