Today we are fortunate to have Brian from Luke 14:28 on the blog talking about relationships and money.
My wife and I spent a lot of time getting ready for marriage. We dated for several years, attended pre-marriage counseling, and talked for countless hours about likes and dislikes, our families, children and careers.
We didn’t talk a lot about money though. We might have touched on it briefly during our counseling sessions but I cannot remember sharing deep discussions about our views on debt, spending, or saving. It simply wasn’t on our radar.
I believe our experience is representative of many couples, especially those who marry in their early to mid 20s who have not yet established a career. Money takes a back seat to love and getting out on their own. So the couple starts their married life not really knowing the mind of their spouse in this area.
It doesn’t mean the marriage will fail. However, as noted here, money fights and money related issues have become the top predictors of divorce in the United States. Since that is the case, it should be a priority for couples to discuss these issues with all seriousness. The potential consequences are too great.
So what should be thoroughly explored? Here are four big money related issues that couples should resolve before tying the knot.
1) Mine vs. Ours
This is a philosophical debate over whether or not a couple should combine finances after marriage or keep separate accounts.
Should the couple choose to combine finances, they would pool all their resources into a joint bank account. From this account, all bills would be paid and the flow of money tracked.
On the flip side, a couple could choose to hold separate accounts into which they deposit their own personal money. Under this scenario, bills would be divided and each person would be responsible for paying those bills from their account.
Why this is a big deal: It’s money management 101. The couple has to develop a system of how money will flow from their paychecks to their expenditures and into savings and investments. Without it, too much money will be wasted along the way and the potential for financial abuse/neglect will increase.
2) Understanding Personalities and Values
We all have unique personalities that play out in our values about money. Some, like myself, are free spenders who without some discipline worked in, could spend money at the drop of a hat. We are more interested in having fun with money and sometimes feel controlled or manipulated by a budget.
At the other end of the spectrum are those who demonstrate nerdy qualities with money. They tend to exercise tight control over every dollar and love to stick by the budget. These people get frustrated when the budget is not followed and think the free spenders are being reckless and selfish.
Why this is a big deal: If birds of a feather come together, two things could result. They will either spend all the money they make and be eating dog food in retirement or they will save everything and be rich but have no fun.
If opposites attract, they are inherently going to bump heads over whether to spend or save money because they value money differently.
3) In-law Interference
The design from the beginning of time was that individuals would leave their family of origin and become one flesh. A completely separate unit is formed that has no legal connection to the family of origin. Of course, some basic interactions still occur as we continue to communicate and share in the lives of our parents until they pass away. The idea, however was that the family of origin would not consistently meddle in the affairs of the newly created family.
Yet we know this doesn’t always happen. For whatever reason, some parents can’t let go of their adult children. Furthermore, many adult children can’t tell their parents “No.” What transpires is a family unit that feels manipulated and guilted into decisions by the constant interference and pressure from their parents.
Why this is a big deal: Money is the central component to so many decisions in marriage…children, vacations, holiday travel, housing, lifestyle…the list goes on and on. If parents are being intrusive, the couple will not make decisions that are wise for them. There will always be some angle to their spending so they can satisfy the desires of the parents. Boundaries have to be created and understood by all parties or the marriage is headed for conflict.
4) To Debt or Not to Debt
Whether or not to take on debt and how to manage it once you have it are two highly controversial subjects. It can be so polarizing as couples with different values struggle against one another to get “their way.” If the debate can’t be resolved, the likelihood of the relationship splintering increases dramatically.
Personally, I wouldn’t marry someone who had a different take on debt until that could be resolved. If I believed in avoiding credit and wanted to use debit cards or cash for purchases, I would instantly clash with a spouse who wanted to have five credit cards in her wallet and didn’t see it as a big deal. I’d be trying to bail water out of the boat while she would be filling it back up. That causes frustration on all sides and is a recipe for sunken ship.
Why this is a big deal: Again, this all goes back to values and money management. Couples should be on the same page in this regard so as to develop oneness with their finances.
Couples who deal with these four issues will start marriage on the right foot. It’s the first and most basic step in developing financial success in a marriage, one that will be healthy and enduring.
How much did you talk about money before marriage? What’s your partners view on spending, saving and debt? Did anyone get married only to realize later your partner thought differently about money? How did you handle that?
About the author: Brian Fourman is a former private school teacher now turned stay at home dad and personal finance blogger. His hobbies include rental real estate, running, cooking and sports. In his down time, he loves hanging out with his four kids and hearing his wife talk about all the cool things CPAs do at work. You can check him out providing encouragement and inspiration on his blog at Luke1428.com or by connecting with him on Facebook, Google+ and Twitter.
_________________________________________
Photo courtesy of FreeDigitalPhotos.net by Boykung
Check out some of our favorite personal finance resources:
Are you getting the best credit card rewards? Check out the top cash back credit card offers (updated daily)
Make extra money: 15 ways to make money from your computer
Get the First Chapter Free!
Join our online community and get the first chapter of the book Student Loan Solution absolutely FREE!
I totally agree about in-laws. I know so many (not mine) who cannot let their adult children grow up and make their own decisions. It is a constant source of stress for a handful of people I know.
All very important issues to reconcile before marriage. i think my boyfriend and I are well on our way. We both come from similar backgrounds where both of our parents were in debt growing up, living paycheck to paycheck, and we don’t want to end up like that. We’ve always been open about finances, but that was easy considering we met right out of college with not much to our names!
It’s only been after getting married that I began to realize how important these topics are, and how fortunate my wife and I were to have pre-marital counseling include these financial topics. Settling these issues up front can have a HUGE impact on the success of a marriage!
Your first point about “mine vs. ours” is an important one for people to understand both before marriage and throughout marriage. I think it’s one reason joint accounts should be a no-brainer in marriage. It should also be understood that no one is individually responsible for debt or expenses, regardless who that debt was incurred by before (or during) marriage. I don’t think it’s as simple as being on the same page before marriage, though that’s a huge advantage if you are. You have to actively remind yourself – and your spouse – that finances are “ours.”
Holly at ClubThrifty I know many who are in this same boat and the sad thing is I see many grown adults who let their parents dictate their finances and, to an even greater extent, their lives.
JourneytoSaving My wife and I met in college and we had little to nothing to our names as well. We definitely have some passive income goals and want to be secure in our finances. Sometimes that causes us to work too hard, though, which is a whole different problem.
My wife and I are both frugal so it works out well. She doesn’t want to be bothered by financial issues so I take care of them. We didn’t have a great system when we were first married…it was separate accounts with a joint one and it didn’t work that well in my opinion. Now that our paychecks flow into one joint account, it feels more like we’re working as a team. As for #3…in law interference…have you watched Everybody Loves Raymond? I am Ray…which isn’t necessarily the best thing sometimes.
Holly at ClubThrifty As I raise my children, I have certain targets I’m trying for them to reach. My goal once they reach adulthood is to release them, like sending an arrow flying from of a bow. I’ll still love them my whole life and give opinions and counsel when they ask. But I won’t be interfering with the day to day issues of their life. It wouldn’t be my place.
JourneytoSaving It’s great that your level of communication is so high and that you know a lot about one another. Marriage is such a big step…I learned so many things about my wife after we got married that I didn’t know before hand.
fipilgrim I would strongly encourage every engaged couple to go through marriage counseling or attend a marriage seminar somewhere. I even think financial programs like Dave Ramsey’s FPU class should be attended during the engagement. It’s worth the $100ish investment to hash these money issues out before marriage.
DC @ Young Adult Money I agree on your point of joint accounts DC, although I know others differ and have had success separating them. For me, it seems to just go along with the vows and the idea of oneness in marriage. You share with your partner in everything until death do you part. Why not combine the finances also?
Andrew LivingRichCheaply “…working as a team…” That’s the essence of it. I feel so much more empowered to handle money the right way when I team up with my wife on it. There is full disclosure of everything that is happening with our money. Really love ELR…a model program for in-law interference.
I think that every engaged couple needs to go through couple’s financial counseling before they marry. And the conversations you bring up are perfect ones to have, especially figuring out your individual money personalities. I see so many couples where one person is the spender and one person is the saver and it creates a lot of unnecessary friction in their decision making processes. You really need to be on the same page as far as values and goals otherwise it is easy to turn from being a team to fighting against each other.
Really enjoyed reading this Brian! I really don’t remember discussing money before we were married. We were in our early twenties when we tied the knot and had basically no money. Just lots of student loans: ) We’ve definitely had our differences when it comes to money and investing, but we are always able to come together and make a decision on our finances. I think working through these differences and coming to agreements about our finances has made us a stronger couple. We are a team and enjoy doing whatever we can to build our life and wealth together.
I’m really grateful I’ve always taken the time to have long courtships. I’m such a different person, emotionally and financially than I was in my mid 20s. Had I married my boyfriend at the time, that would’ve been a disaster. It was hard enough moving out after five years.
blonde_finance “…figuring out your individual money personalities.” This is a big one. I just assumed my wife would view money the same way as I did. Or at least I believed it wouldn’t be hard to convince her to see it my way. When we really started to dig into it after our marriage, I found us to be in agreement on some money things but polar opposites in others. I’m a spender she is a saver. It’s taken us some time to work through that and strike a balance that is pleasing to us both.
BudgetforMore I found that communication about money did just about more than anything else to bring us closer together. There is something about sitting down and working through the budget especially that draws people closer together…eventually. It can be tense, especially in the beginning.
brokeandbeau “…long courtships.” I think that is wise. The emotional and psychological consequences of a divorce would be worse. The stress and tension are amplified off the charts when kids are involved.
We were lucky to have a good friend who was a pastor perform our wedding ceremony. Before the wedding she sat us down and gave us a list of things we needed to talk about before we got married. Money was on the list! Although I don’t think that the conversation that we had was all that long or in-depth, at least it gave us a place to start from. It was the first of MANY money conversations we’ve had!
colormefrugal “…gave us a place to start from.” That’s the problem with many couples…they don’t know where to start. Money management seems like such a daunting task when you are uninformed and unaware. In reality, the basic steps to financial success are pretty easy to understand…they are harder to implement.
Great post Brian with some very useful advice. My wife and I were always on a pretty similar wavelength when it came to money, so there were no issues when we got married. But the challenge now is that my views on money have been changing, slightly more towards frugality / financial independence, where as this was never really on my wife’s radar.
Fortunately our views and money behaviours are still pretty similar, but occasionally I can get slightly more extreme. Despite working hard to test your views before being married, you might still have to deal with the fact that people change, grow and learn – having great communication, patience and an ability to really listen to each other is really important to keep you both on the same path.
Jason@Islands of Investing On changing views…I can see how that could happen Jason. Like you said it’s important to keep the communication going. One thing I wouldn’t do is put intense pressure on or badger the other person to come around quickly. You don’t want it blowing up into all out conflict every time the subject comes up. Take it slow…give them time. Perhaps attending a seminar related to marriage or money might help bring the views/opinions closer together.
All points that you made are valid Brian. Concerning the in-laws, another related aspect is that discussions need to be had concerning potential elder care down the road. If the in-laws are in a bad situation financially and will not be able to afford a comfortable retirement, the children will inevitably bear some of that burden whether they like it or not. A couple really needs to be on the same page where that is concerned. I speak from current experience and fortunately my DH and I are 100% in sync on how we intend to handle it.
Great points, Brian! I personally like the idea of keeping finances separate, but I’d like to hear more from couples who have made that work. I’m definitely more frugal than the average person and don’t necessarily expect my partner to be the same.
I’m not in a serious relationship yet but consider that money will be one of those important items.. For me it is really about being open, transperent and having clear communication around the topic :)