The wedding season is about to begin! Yes I know this is September and the Americans reading this are probably thinking, “what is she talking about? The wedding season just ended.” Not really, I can’t help thinking in “Nigeria” and for us, the wedding party season is just about to begin. From now till December 31st, it is going to be celebration galore. If the bells are ringing for you my dear friend, accept this beautiful and essential wedding gift of from Our Financial Coach, and feel free to share with others too. Here are 10 things to do before you sign those dotted lines:
- Make Peace With Money: By this I mean, understand your personal relationship with money. What are your strengths? You are good at saving your little bits every month? You watch the stock market like a hawk? You stay away from debt? Live within your means? Know what you bring to the table financially before going into the union. A good place to start is to find out what your unique money color Then prepare your personal DOES (Debt, Own, Earn, Spend) sheet. You can read more about this in chapter 2 of my book – What Color Is Your Money?
- Do Your Due Diligence: Just in case you haven’t heard, let me be the first to break the news to you – marriage is a merger of two businesses. I am not saying you should or should not sign a pre nuptial agreement, but if you are blinded by “love” and refuse to see marriage as a serious business agreement, then you may be in for a shocker. So what happens when 2 businesses wish to merge? A due diligence review is conducted by us accountants, right? Each party has full knowledge of all the assets and liabilities the other is bringing into the new entity. If you want a successful merger, then you have got to approach marriage this way as well. What do your individual DOES sheets look like? What loans are you bringing into the union? Car notes, student loans, credit card balances, and mortgage on primary or investment properties? Be sure to disclose all. If you love your partner, you owe them a duty to let them know what they are getting into. Beyond full disclosure, ensure there is clear communication about who pays what. Will your husband love you enough to start paying off your 6 digit medical or law school loans? Sign me up for that one!
- Figure Out Your Destination: It is very common to discuss dreams and wishes for the union – Where will you go for the honeymoon? How many children do you want? Where do you want to live? while those are all great conversations to have, it is also necessary to discuss your financial goals as a family. What will your joint DOES sheet look like? What will your financial goals be for the first year? Do you want to pay down or pay off all debt before you buy a home? It is important to discuss critical “post-merger” financial plans before signing the dotted lines so you don’t wake up one day to find the husband has bought a new Harley Davidson power toy while you are working the phones calling realtors to get a new house.
- Assign Money Roles: So the husband’s money color is grey, uh! Dude will never buy anything new or expensive ever, laughs! And the wife’s money color is yellow, so she is going to spend all the groceries money in the shopping mall buying the latest designer items, so who should hold the money? Should there even be any “family money?” Will you have a joint bank account? Who will administer the funds therein? These are important, though unromantic conversations to have. It is important to establish clear goals and put “loving” controls in place to ensure these are met. In this case, the “Yellow” wife should obviously not hold the savings account passbook unless the family considers a closet full of Gucci shoes and purses a good way to plan for retirement. Who will ensure that bills get paid and on time too? It is probably the grey husband who doesn’t like debts and financial hassles. Bottom line is use your strengths to assign roles, but make sure no one is kept in the dark about family finances.
- Draw the Lines: So what’s the plan to pay bills, fund vacations and grow the family fortune? The husband pays all the bills and the wife spends her money enjoying life? I actually like that plan, but it may not work for you all. So it is important to define how things will work in the family accounts payable department. There can be many twists and turns related to this topic especially if one party is not working outside the home or where there is significant disparity in income. Regardless of this situation, I advise that the new family start out with at least 4 bank accounts – His account, Her account, Our bill paying account, and Our savings account. That way, the yellow husband can be free to buy a Harley Davidson power bike with funds from his account, and the wife can stock up on all the Gucci with her money without anyone getting offended or angry. Or at least the craziness can be minimized while the family stays on track to meet or exceed established goals. So what if the wife is not going to work outside the home? Well sisters, this is the time to discuss and agree upon the salary the husband should transfer into your account unfailingly every month. And this is not the housekeeping allowance, this is your salary for putting up with him, laughs! But seriously, in order for the marriage not to be a prison cell, each party should have some change they can spend however they like.
- Plan Board Meetings: It is romantic to plan and prepare for the places and days you will select as your date nights to keep the fire of love burning, but how about the dates to discuss money? I personally do Financial Fridays, when I look at how much I have spent and what I plan to spend the following week just to see that I am still on track. You honestly want to plan for this, it seems unromantic, but the alternative is worse. I will rather choose unromantic open discussions about money for an hour every week than find myself in a divorce mediation hearing trying to share debts and money. The reality is that the way we plan to approach money in our relationships can affect all other aspects of the union. There are sad stories of widows who are not only mourning the loss of companionship but also finding out about huge debts or starring at empty coffers they thought were full of gold coins after the loss of a loved souse. While we wish and pray everything will work out fine in the marriage. It is very important to do our own part to make sure we get the money right.
Discuss Your Debt Strategy: Will your new family acquire anything on credit? Will one party buy anything on credit? You may think it does not concern you if your spouse chooses to buy everything on credit, but it really does. If you live in a community property state like Arizona, it is very important that one spouse does not go out acquiring debt without the consent of the other because both will generally be held liable for such debt. So decide what if anything either or both of you can buy on credit.
- Put the Right Foot Forward: Still on debt, it is important to avoid the fad of starting your marital life on credit. One thing people are owing for these days, which really baffles me is wedding expenses. Why in the world would I borrow money to show off to people? As a Muslim, I know that getting married is one of the cheapest events ever! Starting your marriage on credit is as bad as building a mansion on ocean sand with no foundation. It is a bad move point blank period, end of story. You will get your fairly tale wedding if you do things right. How about you start with a wedding in your living room this year, save money and work hard then renew your vows in front of friends and family when you have got more cash for a party?
- Put Your Money where Your Heart Is: Make a check list of agencies and organizations that need to be notified about your change in status. Retirement benefits managers, insurance companies, your work place, doctors and banks are some of the places you need to notify and list your spouse as your primary beneficiary. You are most likely not planning to die soon after getting married, but just in case it’s your time to exit the stage, you don’t want to live your spouse out in the cold because you were to lazy to list him/her as your primary beneficiary on your life insurance or 401k. So be prepared.
- Bring In Your Strength: Yes 2 will become 1, but that does not mean you should lose who you are in the marriage. Be ready to make sacrifices, but also get ready to bring in your strengths to make this marriage work. If you are a saver (blue), and your spouse is a spender (yellow), guess what? Your combination is fantastic! Actual combination of both of these colors produces the color Green. So why lose yourself when you can form a formidable team by combining your strong points and minimize your weaknesses?
So take a break from the wedding shopping to tackle these important items on your To Do list, and if the conversation seems awkward, contact Our Financial Coach, and we will be happy to help you lay this critical foundation for a solid happily ever after. We guarantee 100% confidentiality too! Already married? It is not too late to start the money talks so the crazy fights over money can be minimized. Congratulations and may your love last forever!
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