The weather is warm and wedding season is in full swing with more than 2.2 million couples expected to tie the knot (either for the first time or for the nth time) this year.
But if history is any indication, we know that 40-50% of those marriages will end in divorce or separation and financial issues will be one of the biggest causes.
How can you avoid letting financial issues derail your marital bliss? Here are my tips.
WITH SO MANY WEDDINGS STILL YET TO HAPPEN THIS YEAR, WHAT SHOULD COUPLES BE DOING BEFORE THE WEDDING TO TRY TO HEAD OFF FINANCIAL PROBLEMS IN THE FUTURE?
- Talk about money early and often
- Less than half of all married couples discuss financial topics before getting married. This is sort of like not talking with your boss how much you’re going to be paid before you accept the job — there’s bound to be conflict if you’re not on the same page at the very beginning.
- Take your first financial decisions together seriously
- The way that you spend money on the engagement ring, wedding, honeymoon etc. are precursors to how you’ll spend money when you’re married. If you “look the other way” while one of you overspends during the planning stage, it will be harder to change those habits when you’re married.
- Further, don’t succumb to societal pressure when deciding how much to spend. There is no proven correlation between how much you spend on an engagement ring or your wedding and how successful or long-lasting your marriage will be.
- Write your “financial wedding vows”
- These are similar to your traditional wedding vows, but these will govern financial decision-making, budgeting, spending etc.
WHAT ARE THE MOST COMMON FINANCIAL ISSUES THAT COUPLES FACE ONCE THEY’RE MARRIED?
- Opposites Attract –Spenders attract savers. Risk takers attract the risk-averse.
- Financial Infidelity –Lying or not being forthcoming about their financial situation, hiding purchases, etc.
- Separate or Joint Bank Accounts –Should all of the money be held together?
- Share of Bills – This also applies to dates, and vacations…who pays?
- Paying Debt – Should one spouse be responsible for the other’s student loans?
WHAT’S YOUR ADVICE FOR COUPLES WHO ARE ALREADY MARRIED?
- Understand the other point of view –How your parents dealt with money probably shaped your financial habits. Appreciate that your spouse might have grown up in a different environment than you.
- Set goals together –Talk with an advisor or counselor to help mediate financial arguments. It helps to have an impartial third party to discuss your issues with.
- Consider a pre-nuptial agreement – ALL married couples have a prenuptial agreement, it’s called divorce law. However, a lot of people are unhappy with the way divorce law works, and prefer to take control of their lives, rather than leave it in the hands of the government. Hope for the best, but plan for the worst.
Financial advisor Rob Wilson is the chief insight officer at his independent-based financial advisory firm, Wilson Insight. He’s the author of the new financial advice book Secure The Bag: Create the Life You Desire By Managing Your Money Like You Mean It — as well as a frequent contributor to CNN, CBS, NBC and right here on the TJMS.