Congratulations! Getting married is a monumental step in life. It is not only a union of two individuals, but the bringing together of two sets of finances. While love might be the foundation of that union, the realities of merging two sets of finances cannot be overlooked. Money matters can often become a significant source of stress and conflict in a marriage if not handled and addressed properly. That is where pre-marital financial counseling comes in. It is a proactive approach to addressing financial concerns, setting goals, and establishing a solid financial foundation for the journey ahead.
Understanding the Need for Financial Counseling:
Financial issues are a leading cause of conflict and separation in marriages. The financial landscape within a marriage is multifaceted, encompassing income, spending habits, debt, savings, investments, and long-term financial objectives. Each partner brings their own beliefs, attitudes, and experiences regarding money into a relationship, which can cause friction. Pre-marital financial counseling provides couples with an opportunity to explore and better understand each other’s financial values, priorities, and aspirations. By addressing potential conflicts and establishing healthy communication patterns early on, couples can mitigate financial stressors and build a stronger, more resilient relationship.
What is your Money Story?
A wonderful place to start is with an exploration of each partner’s financial values and beliefs. This involves examining each other’s upbringing, experiences with money, attitudes towards spending and saving, and any underlying financial fears or anxieties. Understanding these factors is crucial for identifying potential areas of friction and developing strategies for constructive communication.
For example, one partner may have grown up in a household where money was tightly managed, leading to a conservative approach to spending and saving. Meanwhile, the other partner may have experienced financial abundance and prioritizes experiences over savings. Recognizing these differences allows couples to find common ground and devise a financial plan that reflects their shared values and aspirations.
Great discussion questions:
- What is your relationship with money?
- How was money discussed when you were growing up?
- Are you a spender or a saver?
- What is your credit score?
- Are there any bankruptcies or other negative financial events in your past?
- What things do you consider to be “essential” vs. “non-essential” expenses?
- What assets and accounts are you bringing into the marriage?
- What are your debts?
- Who are the financial professionals you are working with?
Jointly Managing Finances
Navigating how to manage both joint and individual finances within a marriage is one of the common challenges faced by many couples. It is crucial to discuss joint bank accounts, shared expenses, and individual discretionary funds, ensuring that both partners feel empowered and respected in their financial roles. Additionally, addressing concerns about financial independence ensures that each partner maintains a degree of financial autonomy while prioritizing the collective well-being of the marriage.
Budgeting, which is often overlooked, is fundamental to financial management. Crafting a comprehensive budget that considers both shared expenses and individual discretionary spending is essential. A well-structured budget allocates funds towards essential expenses, savings, debt reduction, and recreational activities, ensuring that both partners have a say in financial management. Furthermore, open dialogue about financial responsibilities, such as bill payments, joint accounts, and long-term financial commitments, is crucial. Defining roles within the relationship before marriage can also be helpful.
Great discussion questions:
- Do you want to combine finances or keep separate accounts?
- Who will create and monitor the budget?
- Who will pay the bills?
- Who does the taxes?
- How will we spend discretionary money?
- Will we tithe or donate money? If so, how much?
- How often will we jointly sit down to review our finances?
- How much can we spend independently before we need to discuss the purchase?
- How will we handle money disputes?
- How do we feel about lending / gifting money to family or friends?
- How do we feel about borrowing money from family?
Planning for the future
A primary goal of pre-marital financial counseling is to assist couples in setting realistic and achievable financial objectives. These may include short-term goals like debt repayment or saving for a wedding or vacation, as well as long-term aspirations such as homeownership, starting a family, or retirement planning. Establishing clear goals enables couples to align their financial decisions and work together towards a shared purpose. Moreover, setting measurable targets fosters a sense of accountability and motivation, promoting a collaborative approach to financial management.
Debt, if not managed effectively, can be a significant stressor for couples. Pre-marital financial counseling provides guidance on managing debt, prioritizing repayment, and negotiating favorable terms. Discussions about credit scores and credit management can empower couples to make informed decisions safeguarding their financial future. An emergency fund is crucial for financial security during unexpected expenses or income loss. Emphasizing the importance of building an emergency fund is another key aspect of pre-marital financial counseling.
Great discussion questions:
- How soon can we accumulate an emergency fund?
- What major purchases might we make within the next two years?
- What is the timeframe for starting a family?
- When we have a family, will both of us continue to work?
- Will we pay for children’s education? How?
- How much should we be saving?
- What are our retirement goals?
- Will we work with a financial planner?
Pre-marital financial counseling is an invaluable investment that can enhance the health and longevity of a marriage. By addressing financial concerns proactively and early, couples can foster open communication, mutual respect, and shared financial goals. Whether it is setting a budget, managing debt, or planning for the future, financial counseling equips couples with the tools and knowledge they need to build a stable and fulfilling life together. As they embark on this new chapter, couples can take comfort in knowing that they have laid a solid foundation for a prosperous and harmonious future.