Whether you’re recently engaged, planning on tying the knot soon, or hoping to find a partner you can spend the rest of your days with, here are a few pointers when it comes to marriage and money.
Get on the same page as soon as possible.
A recent survey in the UK cited money worries as the biggest reason for marriages ending. If you’ve miraculously stumbled upon the love of your life in a Mugg & Bean coffee shop, and you both have the exact same views on money, count yourself lucky 🙂
As much as you love your partner, your views on finances may not align. Having an honest conversation about your respective approaches and how you will accommodate each other’s needs may be uncomfortable, but will be helpful in the long run.
Here are a few questions to get your conversation started:
How much money is enough?
As much as possible seems like the simple answer to the question because we all know we need money to live on. The question is how much do you really need as a couple? Is your spouse shooting for a villa in the south of France while you’d be comfortable renting a one bedroom flat in Midrand?
You need to work out what your “enough” is.
If you are both super ambitious and want the high-rise penthouse apartment, and you’re willing to trade 16 hours a day to get it, then that’s fine. You are on the same page. The problem is when one of you is looking for something completely different. If you don’t need a million in the bank account and your partner does, you’ve got work to do before you plunge into a marriage. One or both of you will need to compromise and it’s during this negotiation of “you want this and I want that” that your long-term compatibility is going to be tested.
How much debt are you willing to take on?
Debt is extremely dangerous! More than 10 million South Africans are over-indebted and are one paycheck away from financial ruin. As a couple, you should enter your union with a clear understanding of the debt you are both bringing into the marriage, as well as the amount of debt you are prepared to take on. You can only answer that question once you’ve hashed out the “how much is enough” question. Are you happy to cruise around in a paid off 2007 VW Polo Player, or do you want a new Land Rover with a R10 000 monthly commitment and a balloon repayment at the end, big enough to build a small house? These are questions only the two of you are going to be able to answer, so a chat is helpful before you start assuming you know the answer to these questions.
How much would you like to be saving and for what?
If your plan is to take an overseas holiday once a year because that is your thing, then commit to a budget that allows you to take that break. If you’re into refurbishing old vehicles and like the car bonnet up on a Sunday afternoon while sipping on a cold beer, make it clear that you need some money for your hobby and build it into your budget.
Earlier in this post, we spoke about resentment and how that ultimately kills off the love you clearly had when you decided to enter your marriage. Resentment born out of “money woes’ can largely be attributed to one or both of the partners having a sense that they get out of bed every morning simply to pay bills and settle debt. We all have dreams and things we want to do outside of work. If you don’t have enough money to pursue those dreams, that “what’s the point” feeling is tough to ignore, and may cause strain in your relationship.
How you share your money
Part of the territory includes deciding whether or not you will get married with an antenuptial contract. If you choose this option, then you will be seen to be married in community of property. In simple terms, this means you will be seen as one when it comes to your finances. If your spouse brings R500 000 worth of debt into the marriage, you will be jointly saddled with that. You effectively own 50% of that debt.
If you like the idea of antenuptial contract, but want to keep what each of you brings into the marriage separate, you may want to consider an antenuptial contract with accrual. This means the day you get married, everything outside of your marriage is excluded, but everything you build together from that point onwards is seen to be jointly owned.
If you get divorced or pass away, the way you got married plays a major role in how things are ultimately wrapped up. If you simply begin your marriage with the end in mind, then you are halfway to sorting out a lot of the money problems that might arise when that day comes.
Another important document to get finalised is a will. This determines who gets what if you pass away. Along these lines, it is also important to update the beneficiaries in any policies you may have if you wish to include your future spouse.
All of this may seem a bit daunting, but it doesn’t have to be.
Be open and honest about what you want and need out of your relationship and talk things through. Don’t assume you know, take the time to find out. If you and your partner happen to have completely different views on money, acknowledge this and do your best to understand and support each other’s financial priorities.
Until next time.
The Wise About Life Team