The 1st Step in a Healthy Marriage – Combining Finances is a Decision Worth Making Together (See Part 1 Love, Money, & Marriage).
By Clay & Nicole Akers (who will celebrate 16 years of marital bliss on April 1, 2016)
According to TheKnot.com, June, August, September and October are the most popular months for weddings – that means, we’re rapidly approaching “Wedding Season”. If you and your significant other are one of the lucky couples looking to tie the knot in the coming months, there is an important wedding preparation you need to be sure not to overlook.
The average cost of a wedding in the US is $30,433 (weddingstats.org) and that doesn’t include the honeymoon. It also doesn’t take into consideration the cost of all the time the couple (and the mothers-in-law-to-be) spend researching and planning – and let’s face it, daydreaming about – the wedding.
However, before you and your SO go dropping 30 Grand to celebrate your union, you should schedule some time together to discuss one of the most important parts of your lives together – your finances.
If you’re already married, please keep reading, you just might learn something, too.
It may sound a little old-fashioned, but it has worked for us for 16 years: After you’re married, there is no “His Money” and “Her Money”, there is ONLY “Our Money”. That’s right, everyone’s paychecks get deposited into the same account. After you each said (or will say) “I do.”, the preacher said (or will say) something to the effect of “You are now one.”
One couple, one account.
Please also note that we said, “After you’re married…” None of you want to think about it during this time of premarital bliss, but sometimes things don’t work out. Even if you’re living together currently and even if you’ve been living together for a while, DO NOT COMBINE FINANCES UNTIL YOU’RE MARRIED.
Honey, We Need To Talk
Now that we’ve got that part out of the way, let’s talk about what the two of you need to talk about. Many of these things are things that we wish someone would have told us to talk about before we got married.
We have no doubt that between the two of you, one of you is more inclined toward finances than the other, and one of you is more inclined toward relationships than the other. These two may be the same person, or one may be the money person and the other the relationship person – regardless, this is one of those conversations that both the non-money person and non-relationship person are going to need a little time to prepare for. So, take a minute – right now – and schedule an appointment with your partner to spend a couple hours talking about money. Put it on the calendar, and agree to a time limit. Also, schedule an activity to do together when you’re done – my (Clay) suggestion is to make dinner reservations afterward, so that you have somewhere to be at a certain time and therefore a hard stopping point.
Now that the two of you have agreed to meet at a set time – for a set amount of time – in a comfortable, and at least semi-private location where the two of you can speak candidly with minimal (ideally without) interruption, you need an idea of what to talk about.
The goal of this discussion is for each of you to get an idea of what the other considers “normal” where money is concerned. As with most of us, we have a hard time defining our Normal because we don’t really ever think about it, and we probably have very little with which to compare it.
Understand that each of us makes decisions based on what is Normal (that is, our version of Normal), and we very seldom think outside of our Normal. Until, we marry someone to whom our Normal is their Strange. Don’t be offended, though, because to you their Normal is your Strange as well.
However, when Normal = Strange and Strange = Normal, that’s when struggles occur. And, while that first post-marital fight is sure to happen, neither of you wants it to be over something preventable. That is why you two are having this discussion in the first place.
Now that you understand the goal, you can tailor the topics below to your individual situations. Here are some things we suggest you cover (this is by no means an exhaustive list):
- How much money do you earn from your job?
- Do you have a retirement account? If so, do you contribute to it regularly?
- What is your philosophy about debt?
- How much debt do you have?
- How many credit cards do you have?
- Do you have a car loan or lease?
- Do you have student loans?
- Have you ever filed bankruptcy? If so, why?
- Have you ever owed someone money and not paid them?
- What is your credit score? (If you don’t know, use a free resource like CreditKarma.com to find out.)
- Do you pay or owe child support, alimony or are your wages garnished?
- When was the last time you balanced your checkbook?
- Do you maintain a written budget?
This should be enough to get a conversation (and hopefully not a fight) started between the two of you. It should also give each of you some insight into the person you are signing up to spend the rest of your life with. If anything you learn gives either of you pause, or reason to reconsider your decision to get married, slow down and remember that if each of you is willing to enter the marriage with an open mind there is no reason you two cannot create a new Normal together.
He Said / She Said
He (Clay) Said:
Nicole and I met in college and got married about 11 months after we received our Bachelor’s degrees. We talked about a lot during the two-and-a-half years that we dated, we even went to some pre-marriage counseling, but we never discussed finances. Here are some of the things that we learned the hard way, because we didn’t have a financial discussion before we got married.
I knew Nicole dealt with identity theft (probably before anyone even knew what that was) and that her credit score was very important to her. As for me, I spent the first couple years of college collecting free t-shirts, um… I mean credit cards. I also spent more time spending money on those credit cards than I did paying the bills, so my credit was less than perfect – but I had made a life change in the several weeks before Nicole and I began dating. It was really embarrassing when we applied for our first mortgage just a couple months after getting married, and I had to explain the blemishes on my credit report to the mortgage company.
Shortly after I got my first job at 16, I opened a checking account at my parent’s bank. I kept this account throughout high school and college and even into marriage. The problem is that despite the fact I had a BS in business, I had no idea how to balance that checking account. So, me, Mr. Smarty-pants-new-husband, had to ask his wife how to balance a checkbook. It was a very humbling experience, and she was (and still is) a very good teacher.
Within weeks after graduation, I went out and bought my first (and only) brand-new car. I tried to discuss the purchase with Nicole before I went through with it – we were already engaged, so I knew this vehicle and its debt would be a part of our marriage. She was happy for me to have a new car, but I could tell there was more that she wasn’t saying. It turns out that she was apprehensive about taking on $16,000 in debt before our “adult” lives had really begun, but since we weren’t married yet, she didn’t feel like she could say anything. In retrospect, at the time I was hoping she would speak up and tell me not to buy the car.
Unfortunately, these are not the only stories like this that I can share; I could fill a book or two. Now, it’s Nicole’s turn.
She (Nicole) Said:
I remember the new car, and feeling confused at whether or not I had a voice in the matter since we weren’t married yet. At the time I didn’t have a car, and I knew that I would need one too. The rhetorical questions I was asking myself were: Don’t rich people drive new cars? How can we afford this? I didn’t know any rich people, so I knew we weren’t among them, but I did know that this would affect us financially. That was a lot of money. Could we pay it back? I should have been able to share these thoughts with the man I planned to spend the rest of my life with, but I found myself tongue tied. I wish we would have talked about the new car before “we” inked the papers. We would figure it out, after we were married.
The motorcycle was another consumer debt we would figure out after marriage. My heart wasn’t in it, but my head said yes. Clay wanted a Yamaha V-Star. It was souped up with foot controls and sweet amenities. I didn’t like the drain on our finances, but I could stomach it if the payment didn’t exceed $150 per month. In my head I was good with $125, but I suggested the highest end of my comfort zone. When we went to sign the papers the monthly payment read $152.46, and I was not willing to sign. I was clear. My comfort level was $150, not $152.46, and there was no way I was going to sign any papers allowing anything different. I’m kind of hard core like that. Clay was friends with the salesperson and they were talking manspeak with their eyes. The chest bump, the head nod had already taken place. This is a done deal; right, Bud? The salesperson politely excused himself so that we could talk. In the end I signed the papers while swallowing hard to keep from puking. I grew to hate that motorcycle with each payment and it changed our relationship.
Clay’s thoughts: Wow! I can’t believe she still remembers the payment amount 12 years after we sold the bike. That’s my girl. I can still remember the sinking feeling when, after hours at the dealership looking, test-riding, and negotiating, Nicole turned to me and said, No. That’s more than I’m comfortable with. I said $150.00. I should have listened to her and walked away. Instead, I talked her into it, saying I’d give up Dish Network if I could just get this bike. It was a problem in our marriage for the next two years until we sold the bike. (I lost interest in it and stopped riding it a year prior to selling.) For the record (and my pride), there was no chest bump.
Nicole’s thoughts: Okay, I concede, there was no physical chest bump, but there was male comradery, and extra pressure pressure to sign. I felt like a third wheel, when I was one of the people signing the papers.
Over the years we have learned that money changes relationships. If our relationship is to stand the test of time then we must have some non-negotiables in place regarding money. We agree before the purchase is made or we don’t spend the money. If one has to convince the other too strongly we have learned that the best thing for us is to step back and not make a heat-of-the-moment decision that will change the course of our finances, and our relationship for an extended period of time.
For those of you who are looking forward to tying the knot, whether in a week, a month, or a decade – heck, even those of you who are already married – schedule a time with your Sweetie to discuss how you each view money. We have no doubt that you will learn valuable information about each other, and your marriage will benefit as a result.
An abridged version of this article appeared on spendlifewisely.com