Finding a life partner is likely in the latter end of the first stage of financial life. Some people may put off getting married until they are solidly in the second stage of financial life, marked by more stable finances and by the ability to support themselves relatively independently.
Today, we look at pointers for managing the finances of a marriage.
Romance and courtship are times when lovers are often swept off their feet. Love can be so sweet, yet so blind and short-sighted! Planning, budgeting, investing and retirement are intrusions into falling in love. Yet, the simplest of research will reflect the fact that the majority of marriage break-ups result from contention over financial issues.
So, here is some advice: before committing to tie the wedding knot, check that you and your partner have agreeable ideas about family planning, about who will pay what, about how money emergencies will be handled, and about financial goals. In addition to looking lovingly into each other eyes, consider whether you two are looking similarly into the future financial horizon.
Differences are not necessary points for break-up of the relationship; once discussed and observed, your love may be able to overcome even the biggest differences. The key is to have that understanding through discussion.
It helps to be explicit about what will be the couple’s expense budget, even if neither partner wishes to disclose how much each earns. For example, housing is important: where you will live. Which partner will be responsible for this cost? Will this cost be met jointly?
Some couples establish a joint chequing account. But even before payment of expenses, some agreement is needed on the level of cost that is manageable by the couple. A joint chequing account may cause more discord if there is not agreement beforehand.
In marriage, each partner can provide financial protection for the other by way of term life insurance coverage. It is a relatively low cost to pay for ensuring that your loved ones are not left in the financial lurch if disability or death come calling.
Another critical aspect of marriage finances is the approach to debt.
A husband once described the fact that his wife was comfortable with high levels of credit card debt as feeling like he was walking on a cliff’s edge. On the other hand, some wives look on significant debt incurred by their husbands without their knowledge as paramount to cheating.
Even before the marriage, significant debt by either party should be declared. For example, student loans can be discussed and an understanding reached on how the repayments will fit into the agreed budget for the couple.
Relationship forming is a typical aspect of the second stage of financial life. It is paramount that the finances of the relationship are discussed by the couple in order to provide clarity to their vision of long-term togetherness.
• Louise Fairsave is a personal financial management advisor, providing practical counsel on money and estate matters. Her advice is general in nature; readers should seek personal counsel about their specific circumstances.
