Marriage and Money: How to be Successful
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A recent survey by Money Magazine found that couples argue over finances twice as often as they fight about sex. In fact, 70% of couples fight about money more than chores, snoring, sex, meal planning and togetherness. According to a Citibank study, more than 57% of divorced couples cite money problems as the cause of their divorce. So how do couples avoid arguments, or worse, divorce? Experts say communication about money is key, specifically about combined debt, spending habits, savings goals and financial planning.
Whether it is school loans or credit card debt, most people come into a marriage with some sort of debt. It is imperative for each partner to lay out their own net debt. Additionally, take into account any combined debt such as car loans, mortgages or joint credit cards. Talking about and planning for debt repayment will most likely be stressful, however having an open conversation will enable both you and your partner to tackle one’s own debt.
Most of the time each partner’s spending habits differ; sitting down and discussing how much each partner can spend without checking in with the other will help avoid those big money fights. This type of check in will also allow for you to stay on track when it comes to your savings goals.
Define your shared savings goals. Are you and your partner saving for a home? Kids? A vacation? Discussing and agreeing on a savings plan will aid in obtaining what you really want out of life (home ownership or travel).
Discussion of financial planning will allow for a shared investment in your future. A financial plan is a reminder of your big goals and how to reach them. This may also include pooling long-term assets, which will maximize your returns and add a level of protection, especially when it comes to joint home ownership. A key item to discuss is retirement; what do you envision for your retirement? How much income will you and your spouse need and how will you get there? These types of questions may seem far off, but when it comes to retirement, planning is essential.
Ideally you and your partner will communicate about these items prior to saying “I do.” Money talks are never fun, but sharing a plan can create peace of mind and a strong foundation for a healthy marriage. Once you have the “money talk,” it’s important to continue the open communication with regular financial check ins, this will allow for you and your partner to discuss what has been working and what hasn’t.
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