Marriage And Money – Issues To Sort Out To Avoid Friction
Love and money don’t mix. One is romantically emotional while the other is pragmatically logical. And we all know how relationships can turn inside-out when we try to put some logic into things.
The problem is that you cannot avoid these issues if you are planning to get married with your partner in the near future. You really need to be frank and share your financial positions with each other before tying the knot. It is like another layer of assurance in the name of transparency.
But usually the main issue is that your partner needs to know that you are sound financially in order to evict that commitment fear. Even if you are poor, it should be alright in the name of love. As long as you are not found out to be deep in debt, you should be fine.
This means you can breathe a sigh of relief not having to declare your millions in a Swiss account as long as you don’t present your financials resembling a person swimming in credit card debt. And the following are important issues to ahem… explore with your spouse-to-be.
You would probably feel a little embarrassed that you have been late in your payments recently due to a lack of cash flow. At least you can blame it on the wedding planning expenses that are invading your bills. But you need to be honest with your partner.
If you are fully confident with your credit, you are probably still curious about your fiancé’s credit anyway. So agree to a fair arrangement by printing both your credit reports to share with each other.
This is important as not only is it a symbol of trust, but also because the credit of both of you will be taken into account when you apply for a mortgage as joint-borrowers later on.
At this point, it is time to discuss who will manage which areas of finance in the household. A failure to draw clear lines can lead to huge fight just from misunderstanding and misinterpretations. Those are the most stupid fights ever.
You might want to categorize money matters into petty cash, luxuries, current accounts, savings accounts, investments, insurance, tax planning, etc. Be clear on who is responsible for which area.
The most common financial structure is that the women take care of all the money. And the men will ask for it when necessary. Seems to be a proven concept.
If you have gotten so close to getting married, surely you must already have a clear picture what are the financial goals of your partner. If not, please ask.
You are not going to be labelled as a coward just because you have no ambitions of getting rich. Wealth, although would be handy, is not something everybody goes about like making it a top priority.
The best combination is that both of you have similar financial goals. It’s great to be rich. But it would be exhilarating to achieve it with the one you love.
In order to keep everything in order, especially in the longer term, you absolutely need to review your cash inflow and outflow like a business. You don’t have to report your daily expenses like a compulsive saver. But you do need to conduct reviews so that fine-tuning can be done to make the most from your buck.
For example, insurance needs should be reviewed annually, household expenses monthly, mortgage refinancing options bi-annually, travel budget annually, etc.
When doing this, it is important to refrain from personal attacks. Remember, you are now a team. Mistakes that any party makes is reflective of the team. Instead of calling someone out for wrong-doings, a better approach is to encourage good habits and behavior.
Who is the expert?
Every individual have their interest and personal strengths. So let person who is strong in a particular area be in charge of that.
For example, some people are addicted to full page supermarket advertisements. They can spend hours looking through those pages. And if that’s not enough, they might even keep those pages so that they can refer to them again later in the week. It’s like leisure entertainment. Although I can’t understand why, I accept it. They are the best people to take charge of saving on groceries and household miscellaneous.
Some people are immensely interested in the stock markets. They cannot go through a day without stealing at least a glimpse at the closing numbers. And they might not be vested at all! They are the type of individuals who light up the moment a friend mentions the stock market at a social gathering. They are a good choice for handling stock investments.
Combining your finances?
A big dilemma new couples go through is whether to combine their finances.
Newly-weds often have no qualms with combining their money into a big pile. But most partners who are not getting married for the first time will insist on keeping things completely or proportionally separate.
Before you decide that the latter option is the way to go, consider this. There are a lot of happily married couples who have been blissful for years without any problems with joint finances.
This means that there really is no correct or wrong decision. Which way you decide to go with this depends on the dynamics and chemistry between your partner and you. Don’t give him or her a hard time just because of a difference in opinion. Nothing is written in law or culture.
However, a hybrid system usually work for all parties.
A hybrid arrangement usually involved a joint account where both parties deposit the bulk of their income into. The balance of their income will them be kept for personal use.
For the joint account, you can determine either to put in a fixed amount, a percentage of income, or an annual committed amount. The account will also be used for household expenditure and basically everything that involved both parties. If you feel charitable, you are free to use your personal money for household items too. Nobody is going to stop you.
You can then pamper yourself with a luxurious lifestyle without a care in the world as long as you charge them to your personal expenses. The problem is that both men and women see their partners having their own money as a threat of possible infidelity.
I’m not going to take the high ground and say you should not think of these possibilities. You just need to assess your own situation and make your own decisions on how to balance trust and personal space.
Ultimately, you want to live happily ever after with your loved one. Don’t let money issues destroy a once in a lifetime thing.