As we grow up, we each build a unique relationship with money – how we use it, how we save it, how much we share it, how much we borrow, how we plan to take care of our family, etc. After marriage, we end up sharing this money-relationship with our life partner. Often two people can have a very different approach to financial planning based on their upbringing and circumstances. In many relationships, financial issues are a huge source of stress, and lead to daily arguments.
One of the most important things to do before marriage is to discuss money at a high level with your chosen life partner. This can be slightly uncomfortable, especially if you have been dating for a short time, but you can start the conversation with any one of these 5 topics -
1. Upbringing and what you've learnt from your parents about money
Talk about your parents’ attitude to money, how they saved money, and what values you learnt from them. Mention how they financed your education, big vacations, or other large expenditures. Mention any financial mistakes made by your parents. Are they financially taking care of your grandparents? These answers will help both of you understand each others’ value system, and financial background.
2. Things you’re determined to do which need money
We all have some things that we cannot compromise on. For example, your father may have taken a loan to pay for your MBA, and you want to pay him back in a few years. Your parentsmay have used up all their retirement savings for you or your siblings, and you want to take care of them financially after their retirement. You may have a grandparent or a sibling who is very old or ill, and needs financial help and you plan to support them after marriage. These needs may apply to both partners – bride’s parents as well as the groom’s parents. When it comes to money, it’s healthy if your spouse treats you and your family, at par with his/her family.
If you plan to start a company, or take a financial risk with your money, or not work for a few years to explore a passion, you should talk about it before marriage. You cannot have a happy marriage unless you are happy individually. Tell your partner what makes you happy, especially if it needs financial sacrifices.
3. Spending habits and comfort with taking loans
This is a common area of conflict between couples. Have a frank conversation and tell your future life partner about all your assets and loans before marriage (you may have a student loan, or a car loan, etc). Mention your habits – how much you spend on your credit card, do you spend more than the limit? Do you borrow or lend money to friends? Some people are uncomfortable with the idea of “taking loans” or even “lending money to others”, while some are not. Some people save little, and don't invest in equity, whereas some people save a lot, and are scared of breaking their investments for any expenditure. Get a feel of how your partner's habits, compare with your habits.
4. Big money moments – buying house, having kids, retirement, emergency fund
Once you get married, the big moments in your shared life will involve money. Talk about how you both plan to save for those moments. Just because you moved from a single to a double income family, does not mean you can splurge more. For those who are getting married in their 30s, having kids is not that far away. What if one of you wants to opt for a career break once you have kids? Is it important to own a big car or save for your kids’ education? How important is buying a house – do you want the flexibility to move cities for your career? Where will you invest your savings? Talk about some of these plans. You may not reach any decisions, but it’s good to have these conversations.
5. And finally – wedding and honeymoon expenditure
Have a conversation about what would work for either family, and discuss any expectations around it. The new generation of India is more open, and more willing to break norms and practices that were followed in previous generations. Tell your partner how you feel about the wedding expense. Do mention if you are planning to spend a large portion of your personal savings, and explore together if there is a better and wiser approach to the wedding.
Most problems of marriage are simply solved with honest and open conversations between partners. Money matters are no different. Although life never works out exactly as per your plan, half the fun of marriage is in planning together. So get started with these conversations as early as you can.
Wish you a happy married life!