Tying the Knot? Talk about Money!
Love conquers all, right? All but for the battles that ensue over money. More than kids, chores or even in-laws, money is the reason most couples argue. If you want to avoid a financial squirmish, lay down the rules of engagement before you tie the knot.
I’m In Charge Here!
In a partnership, each person has the right to know what’s going on and have a say in how things will be handled. Just because one person earns more, has more experience, or is willing to take on the day-to-day duties doesn’t mean they’re “in charge.” If you’re a bossy-socks, it’s only a matter of time before your mate grows resentful. If you’re willingly dominated and over-ruled, well, you made that bed.
Proportionate is Fairer than 50/50
How you choose to split expenses can make you life easier or harder. Insist on a 50/50 split even if one mate earns less and the money will eventually become a sore spot in your marriage. Split joint expenses proportionate to income and each person will have some money left over for their own individual needs. To create a proportionate split, add up your monthly take-home pay. If one mate brings home $2,400 a month and the other $1,800, your net family income is ($2400 + $1800 = ) $4,200. Next, divide one income by the family income and multiply by 100. So $2400 ÷ 4200 x 100 = 57% means the person earning $2,400 would contribute 57% of their income to joint expenses while the person earning $1,800 would contribute 43% of their income.
Credit is a Tool
If you use a credit card and pay the balance off in full every month but your mate insists on carrying a balance, how will you handle this difference in financial philosophy? You can agree to disagree as long as one partner doesn’t put the other at risk. Stay away from joint credit; love doesn’t come into the decision-making when it comes to borrowing money. If it looks like one mate’s money issues will create havoc in the other’s life, think about what the consequence will be once you have more financial responsibilities like a mortgage and kids.
7 Questions to Answer
Don’t let something as mundane as money muck up your marriage. Use these questions to get your money talk going:
Who will be responsible for the day-to-day money management? How will the other mate stay in the loop?
Are you a saver? How much do you think is reasonable to save?
Do you have any debt? For what? How will you manage that debt while meeting family responsibilities? When will the debt be paid off?
Where will you live? For how long? Are you willing to move for work? How far?
What mistakes have you made with money?
Will you be a dual income family or will one of you stay home with the kids? Which one? For how long?
What does your life look like in 10 years?
Figure out how you each feel about money, and how you’ll use your money to achieve your goals, and you’ll be an unbeatable team.
Gail Vaz-Oxlade is the former host of Till Debt Do Us Part and Princess and the #1 bestselling author of books that have included Debt-Free Forever and Money Rules.