Getting married! Have You Discussed Money With Your To-be Spouse?
Nov 03, 2018

From our childhood, we envisioned having a fairy-tale wedding. Our parents started saving and investing for it for years to ensure the grand success of this, momentous event uninterruptedly. But before you actually get hitched you openly discuss every rosy detail about future vacations, food habits, and even planning a family ignoring one major topic—'money’.

Sure, it is a very sensitive topic; one that is avoided until after you’re married. But later, the lack of awareness of how your partner perceives finance, including their spending habits, does lead to some financial stress. Despite the rising trend of divorce in India, globally India has the lowest divorce rate of 1% in the world as per findings published last year by the “Unified Lawyers-Divorce Rate by Country: The World’s 10 Most and Least Divorced Nations” and cited that majority of the marriages end in divorce due to financial disagreements.

What’s changed in recent times is the increase in women’s literacy rate which has enabled both partners to earn, making them financially independent. The highly competitive and stressful work environment prevents partners from spending time with each other as well as decreased their capacity for tolerance.

Such distress can be avoided if two people communicate intentionally with an open and calm mind about money before getting married. Admittedly, to find a life partner is a herculean task, and coupled with basic money management makes it a bigger challenge. Clear communication helps you sail through a lifetime together.

It is best to have the tough discussion before tying the knot with your loving partner, even if you know him/her from a very long time.

My friend Sonia shared with me her personal experience. Shantanu and she have been dating each other since their early teens.

Sonia was a makeup artist and Shantanu was a banker. He always took the initiative to talk about her investments, since she was an impetuous shopper. She was not an avid saver. Sonia was the only child in her family, so she always got what she wanted, and her parents never discussed money in front of her.

Shantanu’s father was a banker, so he grew up in an environment of investments and knew its importance and was comfortable to talk about it. Now due to his profession, he could advise her more prudently about it.

When they decided to get married, Shantanu kept Sonia probing repeatedly to discuss money. They had many disagreements and reached a point of calling off their wedding. In due course, Sonia agreed, and they had a healthy discussion on many aspects pertaining to money. Here are some points for you to cue into with your future life-partner:

  1. Income and spending:

    Financial decisions are made based on the hard-earned money you earn and your outlook on money. Income is a little fuel to our spending persona. Identifying your own and your partner’s financial behaviour pattern is important to understand because both of you will notreach common ground if either of you is a squanderer and the other a tightwad. Hence, it is of utmost importance to understand the financial environment each of you grew up in; so, don’t avoid discussing this detail along with income.
  2. Debt obligations:

    Fully disclosing details about any past or pending loans and any defaults of it will allow you to make informed decisions in the future. The individual’s credit score can influence the overall financial health of the couple.
  3. Savings for future financial goals:

    Do you save to invest for financial goals or just hoarding money in the bank. Talk about retirement and other savings, what are your long- and short-term financial goals that need to be updated and work benefits such as EPF accounts, health and life insurance, and disability benefits. What do you wish to accomplish in the short-term, and where do you see yourself 15 years from now? You may not have a clear timeline sketched out in your mind, but the earlier you start talking about your ideas for the future, the more likely you are to achieve financial freedom together.

    [Read: 8 Key Lessons On Financial Freedom From ‘Rich Dad, Poor Dad’]

    As per our societal norms and the gender inequality that exists, a girl’s aspirations are not accommodated. Times are changing though. So, understanding her financial aspirations would be appreciated and this will clarify each one’s boundary lines. Basically, to what extent one is willing to compromise.

  4. Share of financial responsibilities:

    Talk about shared roles and responsibilities to handle the regular monthly expenses, like paying utility bills. The partner who is experienced generally dons the hat of money manager. But this should not be set in stone forever. Being clear about who will manage day-to-day money matters is important for smooth financial planning. Whether either of you is willing to do things together or switch roles as and when required by thinking of having a budget will ensure a healthy marriage.

    [Read: How To Grow Rich With Financial Planning]
  5. Bank accounts:

    Getting married would be a transition phase from “me to we”. And then there will be combined expenses, the source of funding also needs to be figured out. Having a joint account can help accomplish shared, common goals faster. That could mean setting a joint spending limit, investing towards that new luxe home, and agreeing that both can have a free-hand to spend on what’s left.

    If either of you want to retain a separate account to take care of your parents’ expenses, clear off pending (personal) loans, or to maintain an emergency/ contingency fund, along with a joint account preference, discuss it and ensure that you change the nominee.
  6. Estate planning:

    Don’t keep this discussion till you are old, because the best time to talk about this is before you have tied the knot.  This information will instil a sense of responsibility for each other in sickness and health. When two people understand their responsibility towards each other, then talking on how they would transfer their assets if either one dies gets a lot simpler.
To conclude:

Sonia was happy to tell me that it was wise to discuss these six points before the wedding, as it helped her adjust to her new post-married life. Shantanu and Sonia now have strengthened their bond of love because of that open discussion about finances before their big day.

I appreciated Sonia and encouraged her to continue talking about money will prevent her from creating a financial foe out of her caring partner.

Financial transparency can make a couple vulnerable. So, it helps the partners build trust and have understanding and support for a happy married life.

If either of you encounter difficulty discussing terms of a financial situation, particularly an investment decision, consult a trustworthy financial advisor.

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