Discussing finances before marriage

The beginning of summer brings the start of wedding season and all the last-minute planning, dress shopping and traveling that comes with it. But before saying "I do," either this year or next, experts suggest couples take time to have a less exciting conversation about each other's finances. While this discussion may not be the most thrilling - and may even be one you dread - it's increasingly clear that too many relationships go sour on account of money troubles.

"Money is the primary source of conflict in many relationships."

Scientific research and marriage do not exactly go hand in hand. It's often said that half of all marriages end in divorce, although few statisticians will swear by that widely reported data point. What is more well understood is that finances play a leading role in stress between two partners in many relationships, betrothed or otherwise. One poll cited by CNBC found that among people in a romantic partnership and experiencing some conflict, money was the most common source of that stress (the second most common was "annoying habits"). In the U.K., finances appear to play such a major part in breakups that the first Monday of every year is known to some as "Divorce Day." In that case, it's thought that many couples reach a low point in their relationship after taking a look at all the money they spent over the preceding holiday season. The British are not known for their cheery disposition in general, but it's unclear if this plays a role.

Some conflict in any long-term relationship is inevitable, and not necessarily disastrous much of the time. Still, financial advisors and marriage counselors will attest to the fact that money is a sore subject to broach. Couples who take some time to understand each other's finances are therefore in a better position to handle the especially difficult conversations that are bound to crop up when it's time to budget for a wedding, purchase a home or make any other important decision. The end result, ideally, is a long-lasting partnership where money is not a serious source of strain. 

Understanding money habits

The money conversations that some couples are reluctant to have do not need to be formal and all-encompassing. On the subject of anyone's personal finances, there is usually a lot of ground to cover, and couples who have been together for some time probably already have an idea of where the other person stands. But if you need help getting started, remember to focus on understanding your own money habits and how they gel with your spouse or partner's. Then move on to the details about each other's assets, debt or anything else that needs ironing out.

Understanding your own financial traits and priorities requires some deep thinking about your past, present and future. Financial advisors who spoke to CNN Money suggested that a productive "money conversation" between couples start with the following questions:

  • "How would you describe your money habits?" This question, and every other one in this situation, should not be framed as if anyone is judging the other or pressuring them to change. If they don't already, couples need to know how they both approach the basic concepts around spending and saving. Think about what you and your partner spend money on in a typical day.
  • "How did your family handle money when you were growing up?" We are often unaware of the strong influence our early upbringing has on every facet of our lives. Financial management habits are no exception. "What you grow up with is informative for you and your partner," financial advisor John Rosenfeld told CNN Money. "If you're marrying a person who came from a different background or lifestyle, talking about it will help you understand their habits and expectations."
  • "What do you want your money to do?" This question is the most forward-looking, and may help couples think about how their present-day habits relate to their long-term aspirations. It could also be a clue that some of those habits need to change if there is any hope to achieve those goals. Think about medium-term goals, like paying off debt, in addition to much more distant ones, like saving enough to retire by a certain age.
MoneyHaving these difficult financial discussions earlier will pay off down the line.

Having these conversations can prove incredibly valuable to couples in so many scenarios. Understanding each other's financial habits and goals could make the transition to cohabiting easier, as partners look to combine their finances along with the rest of their lives. Even before marriage, the issue of money is almost certain to come up when it's time to plan a wedding. All told, the average wedding in the U.S. costs upward of $30,000, an eye-popping figure for many. The sooner these financial unknowns get cleared up, the more likely it is that a couple will enter married life on good terms - and hopefully stay that way.

Working through tough topics

Finally, and perhaps most importantly, couples need to talk about what should happen to their collective finances if any worst-case scenarios become a reality. That includes the possibility of a divorce, or the slim chance of suffering a catastrophic injury or illness. Both situations are fraught with a minefield of laws that will have to be navigated, but they might not always work out the way a couple would prefer. Prior to marriage, some choose to prepare a prenuptial agreement, or prenup, that designates how assets should be divided in the event of a divorce. But preparing a prenup that is mutually agreeable as well as legally watertight is an expensive, not to mention emotionally taxing, affair that financial advisors do not recommend for the majority of couples.

Instead, engaged partners can have a less stressful conversation guided by some of the advice above that naturally leads to conclusions around expectations, should divorce or any other major stressor arise in the relationship. Either way, having these conversations sooner rather than later builds a stronger foundation for people in committed relationships that will end up paying off in many ways.

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