On Marriage and Money: A CFP's Perspective

For those in a committed relationship or recently engaged, there’s lots of online advice about how to get through wedding planning and still have a wedding. From the “irritable bride/groom syndrome” to the planning-induced insomnia and worries about family drama to come, there’s probably an article out there to help you deal with the issue and retain a measure of sanity.

Unfortunately, there isn’t much advice about using the engagement period to build a lasting foundation for a successful financial life together. Even though money consistently tops lists as a frequent source of conflict in a relationship, the blueprint for talking about it is curiously absent. As someone who happens to be in the financial advice field and is recently engaged, I’d like to close the gap and start the conversation.

When a new prospect is interested in financial advice, I begin by compiling “a total client profile.” Through guided discovery, I learn about their values, goals, important relationships and assets. When I am speaking with a husband and wife, some of my questions elicit completely different responses. If married people can’t see their shared financial world through the same lens, is there hope for those who are merely engaged?

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I believe there is. However, it begins with having several critical conversations before you walk down the aisle.

First, full disclosure

Building a life together requires you and your partner to work with the same set of building bricks or assumptions. That means being clear on what each one of you brings to the union. You might share tidbits of financial history here and there (such as the fact that your Visa card is maxed out and you cannot charge honeymoon flight tickets until you pay it off), but that “organic” sharing is too disjointed and unreliable to give you a full picture.

Therefore, every couple needs to create a dedicated space for the pre-wedding money conversation. In doing so, it is critically important to get the timing and the setting right. Some people prefer a walk out in nature, where they aren’t facing each other across the table and the changing scenery encourages openness to different perspectives. Others are most comfortable broaching the subject on a Sunday morning over coffee. No matter what, choose a private space where you can speak freely without the fear of being interrupted.

Next, lay out the ground rules. Here are some ideas to get you started:

• Tell the truth.
• Don’t hide things.
• Hold a safe space with no judgment.
• Cover all aspects of financial well-being, including past debt, loans, savings, commitments to support family members, pre-existing business interests, etc.

Here is a real-life example of how failing to do this might backfire. I was conducting a discovery conversation with a well-off couple. As we were talking about relationships, I raised a question: “Which family member relationships are most important to you?” The gentlemen talked about the fact that his mom was getting older, and how they may need to begin supporting her financially. The wife nodded along with approval, clearly aware of this situation.

When I addressed the same question to her, she mentioned that her younger sister had been struggling financially. “I’ve been sending her a couple of thousand dollars every month,” the wife shared in a matter-of-fact manner. “I thought you knew this!” Judging by the wide-eyed look on the husband’s face, this expense (that added up to tens of thousands of dollars over the past year alone) was news to him. An argument ensued, to which I was an uncomfortable witness.

Lesson learned: Don’t assume anything when it comes to money. Talk it through. No matter what you learn, do your best to manage your reactions and responses. Emotional outbursts and exclamations along the lines of “How could you!” won’t move you to a happier place. Focus on the next constructive step. If a compromise isn’t possible, table the issue for another time. Above all, be patient. Getting on the same page regarding money is a life-long process.

Next up, talk about financial goals

Here is a good illustration of how two people living together can have very different definitions of financial goals. I recall sitting at a kitchen table in the home of some prospective clients, working on the client profile. “In dollar figures, how much money do you need or want?” I asked. Simultaneously, the wife replied “$2 million” just as her husband answered “$200,000.” They looked at each other in disbelief and dug in their heels defending “their number.” The irony that a husband and a wife sharing a household could have two “mental budgets” that are different by a factor of 10 was completely lost on them.

My advice? Talk to your partner about financial goals before you get to the financial adviser. Here are some common mistakes that I see on this front.

Mistake No. 1: Too much focus on creating “our” goals and not enough acknowledgment of individual goals. Yes, you are creating a family unit and merging some of your finances, but “my goals” and “your goals” are still relevant. If you are wondering about the degree of alignment in this department, consider having each partner write out financial goals in “mine,” “yours” and “ours” columns. Do this independently, then compare the lists focusing on mismatches.

Mistake No. 2: Allowing one person to hold all the keys. It’s not unusual to see one partner being more comfortable with managing money, whether thanks to temperament, experience or training. Even if you aren’t the money-savvy half of the couple, you don’t have the license to step out of all money matters. On the flip side, no matter how good you are with money, it’s not a good idea to take over. Find a way to capitalize on natural fit and talent while keeping everyone informed. You might consider holding monthly or quarterly “family money” check-ins, or maintaining a shared file with a central inventory of all accounts, bill payment passwords, etc.

Mistake No. 3: Failing to acknowledge that their partners have different money styles. Perhaps the husband comes from a modest background where every dollar was stretched, while the wife grew up on an unlimited, no-questions-asked allowance. By facing the fact that you have different habits and styles, you may engineer a temporary “role switch” where the free-wheeler is in charge of the family budget for a month. Trying on each other’s attitudes and roles can give you new insights and appreciation for the unique gifts you each bring to the table.

Finally, talk about life planning

Procrastinating on life insurance and estate planning is normal and common. Virtually everyone I talk to believes they have decades ahead of them to get it done. No one likes to think about the possibility of serious illness, disability or death. When you are planning a wedding, those topics might seem morbid and unnecessary. However, waiting too long can leave your family struggling to get a handle on finances at a time that already stretches their capacity for decision-making. If you delay action on any life planning area, put a firm reminder on your calendar for when you will pick up the conversation. Don’t let it slip through the cracks.

Aside from procrastination, another common mistake I see on the life-planning front is younger couples skimping on life and disability insurance for the stay-at-home parent. Premiums for disability or life insurance might look like an “optional” expense, but those policies can be invaluable if the family must begin to pay for childcare, housekeeping, etc. in the event that the stay-at-home parent becomes sick or dies.

Money conversations for young couples

Let’s be honest: Money conversations can be tough, especially for those who have not had the best parental modeling around finances. Many couples find that an independent voice of reason can guide them through the obstacles, serve as an accountability partner, and mediate the discussion. If you are feeling stuck or unsure where to begin, talk to your financial planner.

Finally, consider re-framing ongoing conversations about money. To build a solid future together, you cannot stop at “having the talk” once. Too many couples only look at finances when there is external pressure — not enough money to pay the rent or cover an unexpected large expense. As a result, they reinforce the experience of money conversations being stressful, limiting and disempowering.

Instead, consider shifting the conversation from “oh no, we have a money problem” to “what do we have to look forward to together?” Instead of having family budget meetings, have life-planning meetings. Talk about what you want to do together, whether it’s a trip to attend a friend’s wedding in Hawaii or a vacation in Europe. Dream about your future home. Reflect on what experiences will make your life together full, joyful and exciting. That places money right where it belongs — in a critically important “support player” role that doesn’t dominate decisions.