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The pre-marriage 'money talk'

The pre-marriage 'money talk'

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Sorry, lovebirds, but make time during your courtship to talk about student loans, joint checking accounts and credit ratings before wedding bells ring.

That's one way of ensuring that money issues won't become marital sticking points or, worse, lead to a breakup.

Money disagreements are one big reason why many couples don't stay together. According to a TD Ameritrade survey, 41% of divorced Gen Xers said they ended their marriages because of disagreements about money.

A separate survey, by The Cashlorette, an affiliate of Bankrate.com, found that nearly half of all Americans who are married or living with a partner said they argue over money, with most of the fights being about spending habits, being dishonest about money and how to divide paying the bills.

If one of your children is in a serious relationship — even if they appear to be a perfect match — the couple shouldn't put financial compatibility on the back burner until after walking down the aisle.

Your child should consider premarital counseling, which typically involves conversations about money, or meet with a financial planner to go over spending, budgeting, workplace benefits and taxes. Or at the very least, designate date-night money talks. And if they aren't doing these things already, you as the parent wouldn't be wrong to gently but emphatically suggest them; more on that later.

Before tackling student-loan repayments and the merging of bank and investment accounts, have a heart-to-heart about goals and planning for the future, said Casey Snyder, a financial planner and senior vice president at the Sedoric Group of Steward Partners in Portsmouth, New Hampshire.

"By planning together, there seems to be more of a natural flow of money-related discussions that leads to the merging of financial affairs," said Snyder. "But because it's often goal-based, both parties feel like they are still in control and were heard in the process."

Which leads to a follow-up point: "The best money conversations begin in calm environments with a spirit of curiosity," said David Wells, the founder of Family Capital Strategy in Nashville, Tennessee.

The best conversations are also two-way streets, Wells said.

"Each person in the relationship needs to be doing their work on their relationship with money," he said. "If one is willing to press in and open up and the other is not, there is a limit to how successful the dialogue can be."

Building strong financial footings also includes a discussion about some of the nuts-and-bolts issues, including checkbook management. Should the couple continue to keep their own checking accounts? Should a separate account be opened to cover household expenses?

Generally speaking, Snyder said, what's more important is having a system "that works best for each couple as long as it furthers their efforts to plan together and creates financial accountability."

As for one spouse being on top of bill paying, if one person enjoys that, let them take the lead, Wells said. But don't keep the other spouse in the dark. Make time to talk regularly about the checkbook and whether you're making progress on goals.

Wells also said some couples prefer combining all their income into one account to cover bills. Then discuss an "allowance" that each spouse can receive, and set up an automatic money transfer to a separate account.

"Allowance funds can be spent, no questions asked," Wells said. "That is one way to manage the paradox of 'I' versus 'us' around spending and, I think, can head off a lot of conflict."

When the heart is involved, should parents get in the middle of money talks involving the future son-in-law or daughter-in-law? Or just bite their tongue and hope for the best?

"The best thing parents can do is to encourage their kids to do premarital counseling and perhaps even offer to underwrite the cost," Wells said. "It is a roundabout way to have someone ask" the money questions.

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Questions, comments, column ideas? Send an email to sbrosen1030@gmail.com.

Questions, comments, column ideas? Send an email to sbrosen1030@gmail.com.

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