Weddings and Wealth: Moves to Make Before Saying “I Do.”
Did you know that October is one of the most popular months to get married? One of the best gifts you can give yourself and your soon-to-be spouse is a solid financial outlook. While many understand the rationale for premarital therapy, fewer think about the significance of meeting with a financial professional before exchanging vows.
The bad news: Depending on the factors taken into account, financial issues directly cause anywhere from 22-40% of divorces. The good news is that talking about your financial future can be romantic and exciting! This is an important way for a couple to reach deeper levels of communication and trust as well as begin envisioning a future together.
So where do you start?
Begin the conversation about marriage and finances by asking each other who you currently go to for financial advice. Do either of you have a professional with whom you’d be comfortable meeting together, or would you prefer to find someone new? The right person should make discussing the topic of money easier and be able to provide some insights you may not have known about.
For example, at Money Mavens, we often start the conversation by asking a lot of questions about who you are individually so we know where your values lie and better identify how they will align as a couple. This process usually helps couples learn new things about each other, such as what an ideal retirement looks like or what specific concerns worry each the most.
Keep it Real
Next, compile a list of your assets and liabilities. Assets should include employment income, cash, savings, real estate, and investments. Liabilities include all debt, from credit cards to student loans. If either partner has been married before, are there any child support obligations, Qualified Domestic Relations Orders (QDROs), or alimony commitments? Your financial professional should have tools that can analyze the impact of both assets and liabilities as you create your plan together.
Once you have identified your short and long term goals, ask yourselves if you feel the need for a prenuptial agreement. A prenup allows a couple to keep finances separate and determines control for assets and property obtained prior to marriage. This can matter immensely if there are dependents such as children from a previous relationship that will be impacted in the event of a divorce.
Build a Legacy - and Protect It.
Insurance isn’t what you would consider a “sexy” topic, but it can make all the difference in a financial plan. First, who is carrying the health insurance in your marriage? If both partners have company benefits, which plan is the best for your needs? \
It’s also imperative to invest in life insurance that will help cover income replacement in the event of catastrophe and to provide supplemental benefits such as a tax-free retirement income source. Insurance planning is an essential piece of the financial puzzle when planning a future together. Check to see what employer benefits are offered and run them past an independent financial professional that can give unbiased advice.
Money Date Nights
Throughout your marriage, make it a point to schedule regular date nights specifically to discuss anything money-related. Check on goal progress, review the budget, and most importantly, actively listen to each other with an open mind.
Additionally, schedule at least one meeting per year with your financial professional to ensure your portfolio is in good standing. As you and your partner navigate through life together, there will likely be job changes, home moves, additions to the family, and other kinds of transitions that should be considered in your financial planning.
There are many other topics to consider both before and after the wedding, but remain open-minded, stay adaptable, and utilize professional resources to help with bumps in the road. After all, marriage is a marathon not a sprint.
Cheers to many years of combined success!
by Joanna Nash
Sources:
Papp LM, Cummings EM, Goeke-Morey MC. For Richer, for Poorer: Money as a Topic of Marital Conflict in the Home. Fam Relat. 2009 Feb;58(1):91-103. doi: 10.1111/j.1741-3729.2008.00537.x. PMID: 22162622; PMCID: PMC3230928.
The Romance of Pre-Marital Financial Planning. Wealthy Mom MD
Disclosures:
All matters discussed in this article are for informational purposes only. Opinions expressed are solely those of Money Mavens LLC, and staff. All topics covered are believed to be from reliable sources; however, Money Mavens LLC, makes no representations as to its accuracy or completeness. This commercial shall in no way be construed as a solicitation to sell securities or advisory services. Topics should be discussed with your individual adviser prior to implementation. Insurance products and services are offered through individual carriers, affiliated companies. Money Mavens LLC is not affiliated with or endorsed by the Social Security Administration or any government agency.
