A healthy, compatible, loving relationship or marriage should be all about matters of the heart.
Yet when it ends in a breakup or divorce, money is often at the heart of the matter.
Financial worries and stress over money are consistently cited in surveys and studies as the most leading causes of marital strife, worse than infidelity or other conflicts faced by couples. As many relationship coaches and financial experts can attest, couples don’t really get divorced over money, but over poor communication about money.
When couples disagree about finances, cracks in the marriage begin to show, arguments ensue, and rifts are created, all on account of issues that could have been avoided if couples simply talked to each other about money -- preferably before, not after, exchanging vows.
"I believe some divorces can be prevented if the correct questions are asked before getting married, ideally in the engagement period," says Adam Torres, CEO of a wealth management firm. "(It) is vital for both spouses to explore their ideas on money. Conflict can arise not only from lack of money, but also from abundance. Understanding the psychology of your spouse’s mindset can be accomplished by first examining how they were taught their ideas on money."
Explore your financial compatibility by asking your partner some of these money-related questions:
1. What are our saving and spending habits?
"One topic often ignored or overlooked that all too often can lead to significant friction between the couple when they are not on the same page: How to handle their finances," says wealth strategist Ethan Quirin. "The great money question should certainly start with the basics of ‘Are you a saver?’ or ‘Are you a spender?’"
Take the question a step further, says Rhea Pechter, president of consumer savings site StealEngine.com. "One question engaged couples should ask is, ‘What is your approach to purchasing big ticket items? Do you tend to buy on impulse or jump at a discount, or do you take time to compare prices over a longer period?’ she says. "If one partner tends toward impulse purchases of expensive items and other takes time to compare prices and research, it can lead to clashes as the couple works to create a unified household."
Knowing your significant other’s spending and savings habits can make all the difference between reaching future financial goals (like buying a house, having a family or planning for retirement), or going broke. If you find that you’re the thrifty one, but money tends to burn a hole in the pocket of your partner, you might consider keeping separate, not joint, checking and savings accounts to avoid conflicts.
2. How will we handle any major debt?
Debt can put a damper on a marriage and sink it quicker than you can say "I do." Entering a relationship with mounds of hidden or outstanding debt can be disastrous and breed mistrust between couples, says Anthony D. Criscuolo, a certified financial planner.
"The biggest mistake engaged couples can make is to completely avoid discussing financial issues," he says. "Money issues will come up, so avoiding them is not an option and delaying could be costly – both financially and emotionally. By avoiding the money conversation, you are essentially starting off against the odds."
Criscuolo continues, "If you have debt, you should absolutely disclose the details to your partner, and during the money conversation you should not be afraid to ask," he says. "Discuss a plan of how the debt will be paid off, including a timetable. Don’t assume your partner has zero debt, and don’t assume they will tell you about it up front – ask!"
It’s imperative to be aware of previous debt both partners may bring to the marriage, says real estate expert/financial coach Chantay Bridges. "There’s a difference between being one month late on a credit card payment of $50 and owing $50,000 … (or) owing on a car note and owing a large IRS or other judgement," she says. Is it good debt, like a mortgage or student loan, or bad debt, like a maxed out credit card? Developing a game plan to tackle your debts together can keep you in the black for years to come, instead of the red -- but never mix your debts (or even cosign), since you’ll be responsible for your partner’s debt if they become delinquent or default.
3. How will we manage our finances?
Marriage can change your relationship with your finances. Knowing how you’ll oversee your money post marriage -- from day-to-day spending to longer-term investments -- is a common ground you should find as a couple before exchanging your vows. Building a budget isn’t enough; go further by developing a financial plan with your soon-to-be spouse. Together, calculate what your expenses will be into the foreseeable future as newlyweds: what you’ll spend on rent/mortgage, groceries, discretionary purchases and other installment and revolving bills. Who’ll be in charge of which expense?
Your relationship will grow and evolve over time; so should your financial strategy as life brings about new changes. "The money conversation should not be a one-time event, says Criscuolo. "Careers change, family needs change, and the economic environment is constantly changing. Couples should keep an ongoing dialogue about their financial affairs and update their financial plans as necessary. Don’t assume your partner will never change. As you make more (or less) money over your careers, your attitudes and expectations often change. Keep an open dialogue and revisit your financial situation often."
4. What does your credit score/report look like?
A recent survey revealed that 30% of women and 20% of men wouldn’t marry someone with a low credit score. If you’re among the respective 70% and 80% of people who don’t consider FICO digits a relationship dealbreaker, consider yourself financially smart, since one partner’s low credit score won’t affect yours.
However, if you’re ever going to apply for credit together, like a mortgage with both your names on it, or a household credit card, your credit scores play a big role in getting approved and a low interest rate. And the most inconvenient time to find this out is when you’re already married, expecting a little one on the way, and looking to buy a house.
Raising your credit score(s) is easy. First check your credit reports from the three major credit bureaus. (Don’t worry -- pulling your own report won’t hurt your score.) Compare them together. Having a complete, thorough look at your current debts, or past history or bankruptcies, collections, loan defaults of other issues can prepare you best for building better money management skills together.
5. How will we financially prepare for our future children?
"Most couples address the ‘when’ and ‘how many’ when it comes to discussing children, but kids are expensive and talking about the financial impact should also be considered," says Criscuolo.
This might perhaps be the most difficult question to ask each other, since it can be hard to predict how many children you’ll ideally have, where they’ll go to school, what your incomes will be when your kids are born, as they grow, and when it’s time for them to begin school.
Planning for your children’s financial future should arguably be the most important discussion you have -- think financial planning for newborns, to saving for college tuitions, to including them in your estate planning.
"Do you both want to pay for private schooling?" Criscuolo urges newlyweds to ask. "Who will pay for college and/or grad school? Will someone stop working to take care of the kids? These are difficult questions, and if not discussed in advance, they can hamper your relationship bliss later in life. Don’t assume you both know exactly how you want to raise (and pay for) children."
Saying "I do" to your financial future
Staying transparent with each other and fostering good communication about money can be one of the hardest things to talk about with each other, but can prevent problems from surfacing down the road.
"Although it sounds easy, talking about money matters with a fiancé/fiancée can be a harrowing thing," says CFP Cassandra Latsios. "But understanding your partner’s perspective on money and current financial situation beforehand can prepare you both for how the other will manage finances after the wedding."
Latsios recommends couples seek out financial resources if needed. "Ultimately, meeting with a financial planner can be helpful to make sure clear communication happens and develop joint financial goals," she says. "They can help you to understand your combined cash flow and help protect your new marriage from financial risks. If you are not in the position to hire a financial planner, there are also some pre-marriage financial education classes out there that can help you address potential money issues."