Financial problems have been cited as a major reason for divorce in a number of studies. However, that doesn’t necessarily mean a lack of financial resources is the cause of conflict. Rather, it’s often that couples have different ideas on how to handle their money.
Whether you’re recently engaged, newly married or several years into wedded bliss, discussing your core values, long-term goals and financial priorities with a financial advisor can create alignment and reduce tension in couples. As an objective third-party, advisors can help you understand the factors that influence financial compatibility and build empathy for your partner’s perspective.
Here are the top topics to discuss:
Familial foundations. Your financial habits are impacted significantly by how you were raised – in some cases, by showing you how NOT to handle money. The lessons you learned as a child influence your perspective on money. Calmly exploring your financial histories with an advisor rather than during a heated argument can build understanding as opposed to resentment.
Spender or saver tendencies. You each have an inherent tendency to spend or save. It’s beneficial to have both in a couple, even though you might wish your partner shared your affinity for buying cars or love of a robust savings account. I encourage you to think about what that might be like – the pros and cons – of having two spenders or two savers in a couple and appreciate the differences in each other’s nature.
Big-picture priorities. Would you rather spend money on life experiences or material possessions? Is tithing or charitable giving one of your core values? Is private education for your kids a top priority? Without a financial plan, it’s easy to make short-term decisions about money. However, if you don’t agree on the big picture, it’s tough to ensure what you both spend money on supports what’s most important to your family long term.
Inherited debt. If you’re recently engaged or newly married, it’s important to understand the debt you’re marrying into. Almost all couples deal with student loans or home mortgage debt. Most have not been in the working world long enough to accumulate meaningful savings. Inheriting debt is normal and manageable, but you need to create a plan for prioritizing and paying it off, adjusting your household budget accordingly.
Finding common ground with your partner and enlisting professional expertise early in your marriage is an important foundation for when your assets begin to grow. After all, household habits don’t begin when a future baby arrives; they begin when you say ‘I do’. So, have the conversations now that will help you build a marriage more beautiful than your wedding.
Blog by Andrew Barnes, Wealth Advisor
Category: Financial Service Team