Many couples getting engaged may find it difficult to imagine their marriage not working out, but it is important to address potential financial issues early on. According to the Institute of Divorce Financial Analysts, money problems are a significant factor in a large percentage of divorces, after infidelity and incompatibility. Therefore, discussing financial matters prior to conflict can help set up a marriage for success. Here are six key financial questions that every newly engaged couple should consider.
Debt can either be a tool for wealth creation or destruction, so it is crucial to understand how your partner feels about debt. It is important to be aware of any potential red flags such as high credit card balances or taking on high-interest debts. Additionally, being mindful of your partner’s attitude towards debt, especially if it differs from your own, can help you find common ground and possibly consider options like maintaining separate assets or creating a prenuptial agreement.
Discussing how financial responsibilities will be divided is essential in ensuring that both partners are on the same page. It is important to consider factors like income levels and ranking financial priorities like bills, housing expenses, and future financial goals. Staying proactive and regularly discussing financial matters can help prevent misunderstandings that may lead to conflict in the future.
Deciding whether to merge assets or keep them separate is a personal choice for each couple. While both methods can work, it is crucial to have a clear understanding of each spouse’s financial situation, especially if assets are kept separate. Lack of communication about financial matters can result in couples falling behind on their financial goals.
Understanding each other’s philosophy about the balance between saving and lifestyle choices is essential. Disagreements on this point can lead to financial imbalances within a relationship. It is important to find a balance that suits both partners’ priorities and financial goals.
Retirement planning is another crucial topic that couples should discuss early on. Understanding each other’s retirement goals and timelines can help prevent potential resentment or misunderstandings in the future. Some may envision retiring at different times or pursuing different retirement lifestyles, so aligning these goals is important for a successful and harmonious marriage.
Finally, the family attitudes toward money that you and your partner grew up with can significantly impact your individual money beliefs. Understanding each other’s upbringing and history with money can provide valuable insight into why certain money beliefs are held. Setting expectations and priorities surrounding money can help couples navigate potential disagreements and ensure a happy and lasting marriage.
