A wedding engagement brings a flurry of happy activity, from choosing colors for the bridesmaid dresses to deciding where to live. And in the midst of all the excitement of love and new beginnings, couples often ignore a vital element to living happily ever after: discussing their finances.
Talking about money can be an excruciatingly uncomfortable reality check, a subject lacking all the romance and optimism that comes with the vision of marital bliss. Think about it: Would you rather dream of baby names and future prosperity or go over monthly budgets and debt?
Luis and Nicole Peck, who tied the knot on Jan. 3, say they "kind of" talked about their debts and finances before the wedding, but felt they had a good sense of one another's spending habits after dating for a couple of years.
"If we were like many couples who just met, we would have had more of a discussion," said Nicole, 25.
But many in courtship avoid having the premarital financial chat altogether. Not a smart move, says Carolyn Washburn, an associate professor of family and consumer sciences at Utah State University. She conducted a survey asking residents in Washington County what causes conflict in their marriage. Thirty-nine percent named finances the primary source of contention in their marriage; 54 percent ranked it as the secondary reason for conflict.
"In the majority of unhappy relationships, money is an issue," Washburn said. "It's truly the hardest issue that couples have to talk about."
Research shows there are distinct personality types when it comes to money.
Borrowers are more present-oriented and impulsive, said Jessie Fan, a professor in the Department of Family and Consumer Studies at the University of Utah. Savers, by contrast, look to the future. And then there are those who want to avoid money decisions altogether.
"You need to have a good understanding of your partner's general spending tendency," Fan said. "You don't want to be surprised."
She said each partner should sit down, list their assets and construct a monthly budget with an eye toward the future. Then, compare and share. "If you want to buy a house or plan to have a baby soon,'' said Fan, "these are things you need to save for."
Washburn adds that you need to know if your partner is bringing debt into the union.
"Many people come into a marriage with credit card debt and they haven't discussed it at all," she said. "Be truthful about where you are debt-wise."
She also advises discussing spending priorities such as which charities to support, earning potential and how much money it will take to have the lifestyle you want. Unfortunately, Washburn says, many people put off these conversations until it becomes a problem.
"Utah kids get married younger than most," Washburn said. "They haven't had a lot of financial involvement with their family and a lot of couples haven't talked about [money] at all. All they cared about was that $5,000 diamond."
Marriage and family counselor Laura Brown often sees a fairy-tale mentality at her South Jordan practice, particularly with younger couples.
"They're a couple and they're in love and they think love will conquer all, especially in the financial area," Brown said. "But at some point, you do have to talk about expectations and how your parents handled money and then decide how you will do it."
Brown counsels those entering first marriages to combine bank accounts right away as a show of unity and commitment. But she says finances in second and third marriages require special attention.
"If there are children in the home or assets like a cabin in the woods, you may want to keep the accounting separate for those," she said. "But have the discussion, this is mine, this is yours and what do you want to be ours going forward."
Newlyweds Nicole and Luis haven't combined checking accounts yet, but on a limited budget, they say there's not a lot of spending to track right now.
"We're pretty cheap," Nicole said.
Added Luis, 23, "We know the necessity of saving and the need to live within our means. We're totally OK with being poor right now."
Before saying "I do"
Consider these questions before gettng to the altar:
What is our budget?
Should we combine assets or keep them separate?
How much do you owe on credit cards and loans?
What if an illness or injury prevents one of us from working?
What are our joint financial goals?
Source: Twoofus.org, Northwestern Mutual