Weddings

Engaged? Five money conversations to have before you say ‘I do’


engagedIMPORTANT TALKS TO HAVE

 

You just got engaged. Congratulations! It’s a busy and exciting time full of planning for the future.

But in the midst of choosing bouquet flowers and planning the honeymoon, the one thing you can’t neglect talking about before you tie the knot is money.

For a lot of people, money isn’t something they enjoy discussing. As someone who is newly engaged, maybe you haven’t had many conversations about money with your partner before. It’s time to start talking.

Financial stress is one of the leading causes of divorce, so if you want to retain the blissful happiness you feel as an engaged couple, it’s important to get on the same page about finances early.

I got engaged in June 2013 and married my husband in June 2014. It was a whirlwind leading up to the wedding, but these are some of the conversations that we had before and during our engagement.

Being open with one another about finances, knowing what each person expects, and understanding each other’s views on money has made our transition into married life fairly smooth.

Have these five conversations while you’re engaged and you’ll help ensure a solid footing for your marriage.

 

The Wedding Budget Conversation: Engaged and Planning


First things first: before you can start the exciting process of wedding planning, you need to decide how much you and your fiancé want to spend on the wedding and who’s paying for what. After you’re engaged, have a conversation with your future spouse about your dreams for the wedding.

Maybe you’ve always wanted a huge family wedding with over 200 guests, but your partner may be envisioning a more intimate affair with 30 of your closest friends.

You may have to meet somewhere in the middle. Come up with a vision for the wedding you’d both be happy with – consider the number of guests, types of venues, and come up with a rough budget.

Then, it’s time to figure out if you can afford your vision. Do you or your partner have any savings to contribute to the wedding? Do your parents or your partner’s parents want to contribute financially?

Depending on what you can afford, you may need to adjust your vision and budget for the wedding, or adjust the length of your engagement.

It’s tempting to put down deposits for venues and caterers the moment you get engaged, but have this conversation first and your wedding planning will be less stressful in the long run.

 

The Married Finances Conversation: To Share or Not to Share

 

Once you’re engaged, it’s important to have a conversation about how things will change – if they will change – once you’re married. Everyone has different philosophies about marriage and money.

Some people believe that sharing finances is the key to a happy marriage, while others strongly believe that each partner must maintain financial independence. Think about what you want and talk to your partner about what they’re expecting.

Don’t make assumptions – just because you want shared finances doesn’t mean your partner does, or vice versa. Now that you’re engaged, have this conversation and make a plan for how money will work in your marriage.

Ask yourself these questions: Do you intend to share finances completely? Or, will you have a shared account for household expenses, but then maintain individual bank accounts? Will you have a shared budget? If so, who will track expenses and the budget and how will you communicate about money?

If you are thinking shared finances, check out this on my personal blog “Marriage and Sharing Everything” on how my husband and I have made it work. Also check out Canadian Budget Binder’s Money Saving Tools for tips on making a budget.

 

The Big Picture Conversation: Planning for the Future


You’ve talked about how day-to-day finances will work once you’re married, but you should also have a big picture conversation.

If you’re engaged, you and your partner have probably already talked about what you see in your shared future. Maybe you’ve talked about travel, home ownership, children, pets, and retirement. You (hopefully) have some shared goals and hopes for the future. But have you talked about how you will actually finance these goals and when you see them happening?

Now that you’re engaged, it’s important to be concrete about what you want and what your future spending priorities are. Are you interested in home ownership? Do you see this being a shared purchase with your spouse?

When you have children, do you envision one partner working while the other stays at home – and could this be financially feasible? When do you want to retire and how will you make that happen?

These types of questions are all important to consider as an engaged couple because they will impact your shared spending, saving, and financial planning. Remember, you may need to compromise!

 

The Debt Conversation: Unpacking Your Financial Baggage

 

Maybe you’ve shared your plans for the future with your future spouse, but do you know if your partner has any debt? You may not have cared before, but debt will impact your shared goals.

Set a time to sit down with your partner and have a conversation about your individual financial situations – plan to share any debt or assets you may have.

Find out how much money your partner is making and how much are they saving. Do they have any debt they are paying off? How did this debt accumulate – and is it still accumulating? What types of savings or investments do they have? Do they have a mortgage or car payments?

It’s important for this to be an open and honest conversation free of judgment. This conversation is not about arguing over past debt. It’s about knowing where the other person stands financially so you can make plans together for the future.

 

The Philosophy Conversation: Financial Tendencies


There’s one more major thing that will impact your married life. It’s time to discuss your financial tendencies. Everyone is different when it comes to money.

Some people are more naturally inclined to save and feel stressed if they don’t have money put away for a rainy day. Others would laugh at the concept of an emergency fund and are happy spending every last penny of their income.

Some like to invest and make their money work for them, while others are more comfortable keeping their savings safely tucked away in a bank account. The differences go on and on.

Talk with your partner about your tendencies when it comes to spending or saving. Talk about your debt philosophy. Under what circumstances would your partner feel comfortable going into debt (for example, to buy a home)?

In which circumstances would you feel comfortable going into debt? Recognizing your financial tendencies and those of your partner will help foster understanding as your work together towards your future goals.

What other money conversations did you have after you got engaged? Did these conversations help you and your partner as you headed towards marriage?

Guest Contribution: Alex Daum blogs at Two Broke Newlyweds about personal finance and trying to enjoy life while paying off debt. Recently married, her and her husband are now working towards the goal of paying off over $60,000 in student debt in three years. She writes about budgeting, married life, and debt.

 

its not about how much money you make its how you save it logo

 

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Photo Credit: Freedigitalphotos.net/Tanatar

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8 Comments

  1. While we were dating, we didn’t really have a lot of money conversations in the beginning. He turned out to be pretty frugal and a DIY kind of guy, which was a complete stroke of luck for me. I’m also quite frugal. The big money conversation we had was saving up to buy a house together. That was when we really started crunching numbers and talking about assets and debt (which fortunately between the two of us was very little and was paid off in the last couple of years).

    We’re planning on getting married this fall. Neither of us are really fancy or want a big wedding. We’re trying to keep things relatively simple.

  2. Excellent post. All of these conversations are very important, and probably need to be discussed more than once. Another point to discuss is at what threshold does one person need to discuss a purchase with the other (whether you share finances or not). Some partners prefer to make a lot of joint decisions while others are more independent. But making sure you’re on the same page as to how much one person can spend without the other’s input will help avoid future disagreements.

    1. Good point Gary. I think each couple should discuss that as well. My wife and I talk to each other more about the bigger purchases however we both think about what we are buying and whether it’s a need or a want. Worse case we can always return it if we take it home and have a change of heart.

    2. Thanks for the comment, Gary. That is a good point and a good conversation to have. My husband and I talk to each other quite frequently about what we’re buying just because we’re working together to try stay in budget – for us, if it’s outside the budget or over-budget, we usually would discuss it first. The other thing we do so that we each have a little bit of “freedom” is we get $50 in Fun Money each month. That money can be for anything we want and it doesn’t have to be discussed. It gives us the chance to buy smaller things for ourselves without having to budget every single thing. It works well for us!

    1. Merging accounts was the right thing for my husband and I, but for some people, they may not feel comfortable or may have reasons to maintain a personal account. The other thing is that some types of accounts such as registered accounts (RRSPs, TFSAs) that can only be in one name so sometimes accounts can’t be merged.

  3. We were together for 11 years and then decided to ‘tie the knot’, so we didn’t have to have the conversation all at once. But it’s important to get all the details straight, since money problems can endanger a young marriage.

    1. Thanks for the comment, dojo! You’re absolutely right – these conversations don’t necessarily have to happen all at once or even after you’re engaged. My husband and I talked about some of this before we were engaged – and in some cases we talked about it again after. Some of these things you may talk about over and over, but you’re right – it’s important to get all the details straight!

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