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4 financial chats you should have before your wedding day

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08/02/2015
According to a recent survey published by BlackRock, less than half of Britons (44 per cent) work with their spouses on long-term financial planning. 13 per cent claim it can cause arguments; 11 per cent say that they do not involve their partner in financial planning at all. Talking finance, it would appear, is the great British relationship taboo.

A failure to communicate, however, could have serious implications for you and your marriage. Here are four financial conversations you absolutely must have with your partner before you get married.

What’s mine is yours – including debt?

When you marry someone, your financial lives become intimately interwoven; your spouse’s responsibilities become yours, and yours theirs.

You are not legally culpable for the credit card payments your partner accumulated before you got married, or for loans/store cards taken out in their name alone. Nevertheless, your partner’s credit rating will impact yours, and affect your ability to secure joint credit.

As a result, it is important to have a clear idea about your partner’s financial liabilities before you get hitched – this way, you know what to expect, and can work together on reducing financial burdens together.

Where do we see ourselves on our tenth anniversary?

This is an important question because you and your spouse-to-be may have entirely separate financial objectives.

It is worth compiling a list of individual short and long-term financial goals together. If there are areas of direct conflict, fret not. Again, the answer is not to view the matter as needing to choose between one or the other, but creating a realisable financial plan that incorporates both sets of goals. This may require compromise, or concession – but the only way to find out is through open, clear communication and cooperation.

To merge or not to merge?

‘Should we merge finances in a unified joint account, or not?’ is a very common question – but perhaps the wrong question to ask.

A better approach might be to not view the conundrum as either/or – but to blend the opposing alternatives instead.

Start by pooling a certain proportion of your resources in a joint account, while maintaining individual accounts to ensure a degree of financial autonomy for the pair of you. This not only offers the best of both worlds, but is an educational opportunity – you can learn to adapt to the new realities and challenges of sharing the bulk of your financial resources with another person, and establish trust and understanding.

Over time, you can choose whether (and when) to increase the amount held in the shared account, allowing your relationship’s monetary assimilation to evolve at a pace you are both comfortable with.

Of course, as the years go by, shared financial responsibilities tend to multiply in number and significance. Once you have children or a mortgage, it is not only more sensible, but arguably a necessity, for there to be a significant degree of financial integration in your relationship. However, this is not a decision you need to make immediately.

Who’ll do the spending, and who’ll do the budgeting?

Before you decide how (and, indeed, whether) to divide with your finances, it is worth spending time discussing who’ll manage them.

Again, there is no universal rule for deciding who should take charge of administrative necessities such as ensuring bills are paid on time, and budgeting; nor is it mandatory for only one of you to adopt these duties. In fact, it could cause conflict and contention if one partner is placed in sole control of these duties – whether by vesting too much power in one spouse, or by overloading one person with too much responsibility.

A better approach could be to share responsibilities, and maintain a daily dialogue about your finances to ensure; trust, understanding, cooperation and communication are vital in every aspect of a marriage, and finance is no exception. A united front in respect of finances establishes a firm foundation for the rest of your life together.

 

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