In marriage, money isn’t always an easy subject to broach.
Just consider these statistics:
- About 30 percent of couples say they disagree on money issues at least once a month, according to a 2016 report from Ameriprise Financial.
- Nearly 50 percent of people say they handle spending and saving in a different way from their partner, according to a SunTrust survey.
- And 35 percent of people with stress in their relationship blame finances, according to SunTrust.
Indeed, financial squabbles are among the top marital struggles that can lead to divorce. But there’s a way for couples to avoid these financial fights.
Before saying, “I do,” here are five money questions you and your significant other should nail down together.
How much do you really earn?
It might have been all razzle dazzle and dinners out during the dating period, but, let’s just say that things change once you get hitched. And those memories of fancy dinners and high-priced concert tickets won’t seem so romantic if it turns out that your significant other was spending way above his or her means to impress you.
According to a study by Fidelity, a whopping 43 percent people said they actually didn’t know how much their partner earned — and another 10 percent were off by $25,000 or more. Don’t be among them.
Together, be open and honest about your paycheck now — and going forward. It’s hard to make plans if, together, you don’t really know how much money is coming in.
How much debt do you really have?
Generally speaking, you and your spouse likely won’t be liable for the debt each of you bring into a marriage. But it could have other impacts. For instance, when applying for a mortgage together, one partner’s low credit score could make it trickier for a couple to buy that dream home.
It might be a car payment and a mortgage or debt for student loans and credit card charges. Whatever it is, talk about all of it now so there are no surprises.
How much do you really save?
The average age for a first marriage is 27 for women and 29 for men. Most people in that group have done nothing to save for retirement.
According to a study from the National Institute on Retirement Security, two-thirds of Millennials have no retirement fund; 95 percent are not saving enough. The report says that experts recommend Millennials save 15 percent or more of their salary for retirement.
If your significant other has a retirement and emergency fund, you’ve hit the (financially health) jackpot. If you both have done nothing to prepare for retirement or even put together an emergency fund, know you’re not alone and you have work to do as a couple.
What do you want to do with your life?
Do you want to buy a house? Do you want kids? Where do you want to travel? Do you want to launch your own business someday? What kind of retirement do you want? The money questions are important to cover, but now is the time to dream together. Have these big, important discussions so that you’re both on the same page as you make financial goals for your lives.
Can we be open and honest about all of this until death do us part?
And that’s the big question. You may have all of the answers now, but until you both can commit to being completely truthful in all discussions about money going forward, it will be tricky to avoid the stress, arguments and disagreements that come when couples talk finances. And there will be tough times, including job losses, serious illnesses and other setbacks, that will make financial planning even more difficult.
Before the wedding planning gets serious, make a commitment now to spend the time to have real talks about your future household’s finances.