It's in the air. Romance, the beautiful engagement ring displayed with a kiss on Facebook, the rustle of expensive white gowns, the scent of center flowers, and the jittery nerves of happy-sad parents about to lose their children to the ritual transformation to adulthood and independence - - marriage.
The preparations are immense, exhausting and exorbitant. Everyone wants the "perfect" wedding. But the question arises, are we preparing our young ones financially for the realities of the life they are about to enter?
"They're perfect for each other!" we coo.
But do we ever ask if they are financially compatible with each other? If we really want them to succeed in life and marriage, a per-marital discussion on money is critical. Do they share the same values about money? Is one primarily inclined toward saving while the other is comfortable running up credit card debt? What financial behavior did their parents model, and which one did they take after? Have the parents given them the life skills needed to balance a budget or a checkbook?
Do they both have the same financial goals? Does one want to raise children, save for a home, college and retirement, while the other one is aspirational and wants to trade up to ever larger status symbols – bigger home, bigger boat, etc.?
Are they both willing to forego some immediate wants for more important long-term objectives? If they decide to save for a house, for example, are they willing to give up the expensive sports car or luxury travel in the short term and substitute for a lesser priced car or more modest vacation?
One person in a relationship may be put off by the other's high debt load, even though it may be justifiable. Large credit card balances, or even tuition loans, may cause one to hesitate or resent the other over time. After all, marriage is more than a love bond. It's a financial contract that could potentially make the partners financially liable each other's debts. And who would be willing to spend the first several years of a marriage paying off the other partner's debts? Often, these deep-seated values-based feelings are never discussed openly. If possible, enlist the help of a financial professional or money-savvy relative as a friendly mediator. An honest premarital money discussion could shed light on a lot of potential differences and financial habits that could be acknowledged and addressed by both early on.
In any relationship, it's generally understood that one will be more of a spender and one will be more of a saver. That's okay as long as they are relatively close in range on the spectrum. The pairing up of a spender and a saver creates a nice balance for life. They spend a little, but not too much. They live a little, but not too much. Two savers together could potentially live a very boring life, never spending, never celebrating life. And two spenders united could create financial ruin. I've seen it happen.
When two people have radically different money values, it creates stress on the marriage. Communication breaks down, arguments arise, acting-out behaviors ensue, cracks emerge, the relationship deteriorates.
Money and financial stress are a major cause of divorce. With the proper advance financial preparation, a solid groundwork can be laid for a positive and successful financial future.