Yes, in successful marriages, money does matter. Here’s what Ann Homer Cook, Ph.D., President of A. Homer Cook & Associates and author of today’s blog says:
It is easier to talk about sex than to talk about money, yet unresolved money issues are the number one cause for divorce. Therefore, money matters to a bride and groom beginning a successful life journey together. Many couples share a bedroom, but often find it difficult to have an adult conversation about finances, especially people in love. The time to have the conversation is before the wedding.
Most of us weren’t taught to discuss money in a shared conversation. There is an old joke where the bride says, “My money is my money and his money is our money.” Today, more than ever the “M” word needs discussing due to the cost of living and due to two career couples.
Here are some good questions to get a conversation started between you and your future spouse. How was money handled in your families when growing up? Were there fights about money? Did you feel well off or poor as a kid?
Today, how important is money to you? Do you consider yourself a saver or spender? Do you have any large debts or assets? Who earns the most money and how does the other person feel about it? Lastly, what are your financial dreams (individually and as a couple)? How do you plan on making those dreams a reality?
Before your married life begins, it can be useful to create a starting budget for your household and to agree on who will pay for what within the household. What dollar amount does one spouse need the permission of the other to purchase?
A regular set aside time each month is important to create healthy communication and will reduce tensions. Additionally, the couple’s problem solving skills are enhanced. Compromise is the key.
Where money is spent is where one’s life is. Money management is more than keeping the checkbook balanced.
The following percentages of your household take home pay will give you a rule of thumb of good money management:
35% Housing-mortgage or rent, utilities, insurance, taxes, and home maintenance
20% Transportation-car payments, auto insurance, tag
15% Debt-student loans, taxes, credit cards
10 % Savings-pay yourself first to make dreams a reality
20% Other-clothing, entertainment, medical, child care, tithing
The best money management is to have no debts. Credit card debt is particularly draining on a couple.
A quick Financial Compatibility Quiz created by Randy Schuldt of IHateFinancialPlanning.com may help you and your future spouse explore your thoughts regarding money. Answer Yes or No
- We talk about money regularly.
- We have decided who will handle the bills when we marry.
- I feel my future spouse manages his/her own money well.
- I would feel comfortable if my future spouse made a purchase of $250 without telling me.
- I feel my future spouse knows what my retirement dreams are.
- I know how much debt and savings (including investments) my spouse is bringing into our marriage.
- Between us, we have more than five credit cards.
- I know how much my future spouse makes and what percentage he/she is contributing to their 401 (k) plan at work.
- I feel my spouse avoids sitting down and talking about money.
- We have the same financial dreams.
- I feel like my future spouse treats his/her money as if it’s his/her own.
- I never talked about money with my parents.
- I know how my future spouse would feel if I wanted to quit my job and start a business.
- I would feel comfortable living off one salary if either my spouse or I wanted to quit his/her job.
- When we talk about money, my spouse interrupts me often or dismisses my points of view.
- I feel my future spouse is a cheapskate.
- We have a financial plan.
- We have talked to a financial planner.
Scoring:
Give yourself one point if you answered TRUE to questions 1,2,3,4,5,6,8,10,13,15,16,and 17 and 1 point if you answered FALSE to questions 7,9,11,12,and 14.
(0-6 points) Red Flag. There is a need for much more communication.
(7-12 points) Fork in the Road. You have some areas which need more exploration
(13-18 points) ’nSync. Your dreams and financial plans are together. Go for them!
Remember discussing your new financial life together gives you a solid ground upon which to build your dreams and journey together from the wedding to retirement. Congratulations.
—Ann Homer Cook, Ph.D., President of A. Homer Cook & Associates, A Management Consultant firm