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.
- How to plan your wedding flower budget in advance (canadianbudgetbinder.com)
- What or Who do you rely on for your income? (canadianbudgetbinder.com)
- How to have the wedding of your dreams and still be frugal (canadianbudgetbinder.com)
- How to help your wedding party save money (canadianbudgetbinder.com)
- Scanning Code of Practice (SCOP) In Canada…Did You Know? (canadianbudgetbinder.com)
Photo Credit: Freedigitalphotos.net/Tanatar