Pre Planning Finances Before The Wedding Can Cut Down On Marital Stress
It is safe to say that the majority of Americans don’t consider finances to be romantic or sexy. There is therefore a hesitation to discuss financial matters while engaged. That may be a mistake, however. According to a study by Jeffrey Dew at Utah State University, financial disagreements that occur at least once a week in a marriage make it 30 percent more likely that the couple will divorce. For both men and women, disagreements regarding money were the leading predictor of divorce.
It is therefore important that a couple about to marry discuss finances before tying the knot.
A couple about to be married must be honest about finances. All assets, debts, income and valuables should be out in the open. Couples should also be honest about spending habits. If one spouse likes to spend and the other save, talking about it early on can reduce later tension.
Such a discussion will reveal a partner’s attitude and goals regarding spending. What are the most important places to spend money? Is it student loans or buying a house? Does one spouse have an expensive hobby or like to travel?
Once attitudes are explained, it will be much easier to develop a financial strategy and set goals. These goals include setting a budget and putting priorities on spending – what needs to be paid, what isn’t essential and what can be put off until later.
It is commonly thought that a prenuptial agreement is only for wealthy people who have a high expectation of divorce. This is not the case, as prenups can serve a variety of couples. Much like discussing finances generally, a prenup allows certainty and shows financial responsibility entering the marriage. Because a prenup is invalid if one spouse hides assets when creating the document, it provides motivation to be thorough when discussing money and income.
A prenup can preserve premarital property or financial assets, which can be important if one spouse has child support obligations from a previous marriage, for example. A prenup can also protect one spouse from the debt of the other upon divorce, so that assets outside the marital estate cannot be used to pay off debt.
A prenup also allows valuables to remain in the family, whether they are sentimental or just intended for family members. This could include a family business or an heirloom such as a piece of antique furniture.
Finally, while nobody expects to get a divorce, ultimately it can sometimes be better for a couple to split. A prenuptial agreement will reduce the acrimony and cost of divorce. Instead of a lengthy public battle in court, the couple can use the prenup to more quickly move on with their lives while saving money – which can be extremely important when moving from a two-income household to one.
Professional advice may be helpful. Financial planners and family law attorneys can guide a couple through a discussion of finances. People who are engaged to be married should discuss the benefits of a prenuptial agreement and their legal options with an experienced family law attorney.