Discuss These 7 Money Topics Before Tying the Knot

Our practice works with many young couples with a career in medicine – with a partner or both in practice. Whether a long-term committed couple meet in college, in medical training, or after earning a doctor’s income, they’ll have to deal with the financial side of the relationship quickly.

While many couples discuss their views on marriage, the kids, and where to live early on, they often leave the money out of the conversation. The problem is, this failure can lead to serious problems down the line. In fact, according to a study by the American Psychological Association, nearly a third of adults with partners say money is a major source of conflict in their relationship.

The good news is, whether you’ve been in a relationship for 10 weeks or 10 years, it’s never too late to have that conversation.

Attitudes and situations that may arise

You might be surprised at how so different people’s opinions about money can be – with the family background, knowledge, values, and experience that come into play. Understanding these different perspectives can open the door to the big picture. focuses on making sound financial decisions that meet the needs of each individual and as a couple.

Let’s look at a variety of areas that will be helpful in your discussion.

1. Understand everyone’s beliefs and financial backgrounds.

The financial situation that each person grows up with inevitably affects their financial values ​​and behaviors, making them a good place to start.

For example, my wife and I grew up in very different homes when it came to money. My family always seemed to have enough money; it was not a source of conflict at home. This was not the case for my wife, whose father’s income was not stable, with the burden on her mother, which caused a lot of arguments and family stress.

As you can imagine, our respective journeys have led to different ideas and attitudes around money. So how do you begin to understand where each of you came from?

Here are some basic questions to start your discussion:

  • What did your parents teach you about money?

  • Are you a spender or a saver? How much do you save each month?

  • What is your credit rating and how important is it to you?

  • What assets and debts do you have, and what do you think of your status?

  • What are your financial goals, individually and as a couple / family?

  • What are your worries about money?

2. Agree on a holistic approach to money.

How are you going to decide who pays for what? It all depends on your general approach. An example is whether to separate finances, combine them or a combination. Looking at my wedding, for example, the idea of ​​a shared checkbook is anathema to my wife, and we’ve never had one. For us, the “yours, mine and ours” approach helps us agree on which payment comes from which account.

By agreeing on a holistic approach, we have avoided many financial conflicts and paved the way for healthy discussions about our finances in the future.

3. Avoid surprises.

It rarely ends well when a partner makes a large purchase from a joint account – and it surprises the other partner.

There are several ways to avoid this, such as setting a spending limit on one purchase before you have to talk to the other. Another option is to set a “discretionary” monthly allowance that each person can spend regardless.

4. Discuss the different comfort levels of spending versus saving.

Many couples have different opinions on how much to spend and how much to save. The saver focuses on accumulating money, which can leave the other partner feeling deprived of moderate pleasures, such as dining out, traveling, or doing home renovations. At the same time, if the partner who spends the least thinks the other person is overspending, it can cause them anxiety.

In this case, the couple might consult a financial planner to identify solutions that balance relatively conservative savings with enough pocket money, providing enough comfort for both partners and avoiding guilt and recriminations. In more extreme cases, a financial therapist trained to deal with marital money issues can be found on the Financial Therapy Association website.

5. Find out how to balance different income levels.

We often advise couples where one earns significantly more than the other. It can be difficult for couples with unequal incomes to figure out how to manage the purchase of large purchases, like a car or a house, and even daily expenses, like minor home repairs and groceries. As a solution, many couples use a proportional approach – using a percentage of income as a criterion.

6. Be comfortable with how to finance your retirement.

A looming topic for any couple is how to finance their retirement. It is even more difficult when couples win unequally. The best advice is to act as a single economic unit that maximizes their overall financial health. For example, a doctor earning $ 300,000 may maximize their contribution to the retirement plan, fund a backdoor IRA, and perhaps fund a 457 plan or health savings account. If their partner earns $ 30,000, they don’t have the same savings options.

In this case, the best solution as a couple requires being comfortable with the higher income partner helping to fully fund the low income partner’s tax-advantaged retirement vehicles.

7. Identify together the best way to handle financial matters.

Just as one member of a couple can still take care of all the laundry and the other does the lawn maintenance, sometimes a partner will take care of all financial matters, such as family budget, investments, etc. tax management and insurance. Be aware that there are several snags to this method.

Often the responsibility rests on the relative the time partners spend on household chores both outside and inside the house. However, the partner who is not managing the money increasingly loses knowledge of finances over time, making it more difficult to make good decisions together.

Additionally, the partner who is not managing the finances may blame the other for a financial setback. And even more, the uninvolved spouse may be at a loss in the event of divorce or the death of the financially knowledgeable partner.

Benefits of managing finances as a couple

These discussions are not always easy. If the conversation gets heated, take a time out and come back to it later, but don’t just give it up. When it comes to finances, you and your spouse or longtime partner don’t always agree. But with good communication and an understanding of how each person views money, you can work together on ways to achieve your common financial goals.

The above article is intended for informational purposes only. Please consult a legal or tax professional regarding your situation.

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About Dr Joel Greenwald

Joel S. Greenwald, MD, graduated from Albert Einstein College of Medicine in the Bronx, New York, Joel completed his residency in internal medicine at the University of Minnesota.

He practiced internal medicine in the Twin Cities for 11 years before switching to financial planning for physicians, starting in 1998.

Joel’s wife is a radiation oncologist, which makes him all too familiar with the stresses of medical practice.

Knowing firsthand the challenges of practicing medicine, Joel’s passion is to make the lives of physicians easier by helping them ease their financial worries.

Connect with him on LinkedIn or on his website.

About Larry Noble

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