Dear Engaged Couple-
I have been in recent conversation with an investment advisor at Wells Fargo. He has a wealth of knowledge and, good new for you, he has promised to send me periodic information/advice that I can then pass on to you regarding YOUR financial future. Sweet!
One piece of advice he shared with me that I had not considered before, but which makes perfect sense is this: Decide now, before you marry, whether you are going to save first and then use as “play money,” what’s left over OR, whether you are going to spend your “play money” first, and then save whatever is left over. That’s a big difference! Of course, if you don’t make a budget, hopefully before your wedding, then you may, just by default, end up saving only that money that is left over—which may not get you that new house, in even the very distant future.
What we are talking about is budgeting. That sounds like a scary proposition, doesn’t it? If numbers are not your thing, as they are not my thing, you might want to plan to have a perk after/or during important budgeting conversations. So for instance, plan to go to a bed and breakfast for the weekend of your first ‘big budget talk.” No need to bring your financial information with you. This conversation will be ideological—that is, in the realm of personal philosophies as regards money.
Before you go out for a walk in the woods, or brunch, or a trip into town, plan to spend a good two hours, talking about overarching financial concepts. Here are some big-picture questions to get you started:
- As you plan your finances, will you start with future goals and work backwards? Or, will you only talk about goals after you have a good understanding of where you are at present, as regards your finances? If it is the former, you will right away want to determine your goals—a house? A car? Children?
- Is it your understanding that as a married couple you will pool your assets, or will you keep all or part of your income in separate accounts?
- Will you share personal past debts, or will each of you be responsible for debts you incurred before you married?
- Is a prenuptial agreement important to you? This may be particularly crucial if one or both of you have children.
- Will you take care of each other should one or the other of you become disabled? If one of you dies, do you want the other to be named as the beneficiary or will someone else be named?
- How much money should you set aside for unforeseeable expenses or life-change (the water heater springs a leak; one of you loses a job). Note: experts say that 3-6 months provides an adequate “cushion.”
If you cover all of these six items in your very first conversation, good for you! Treat yourself to that brunch, only not before you have scheduled a second “date” to discuss specifics—say salaries, recurring expenses, how much you plan to save, how much “play money” you want per month, per week, etc. After this second “date” again reward yourself with some play time—a movie. A visit with friends.
Bottom line is, don’t go into your marriage blind to the financial ramifications of this important life-change. And heaven forbid, don’t wait to be surprised by the state of your spouse’s finances, AFTER the wedding.
You will be glad you had those pre-marital conversations!
Happy Wedding planning!
Your Wedding Preacher for Hire