Engaged? Make a meeting about finances a top priority before marriage
I-Team: Importance of discussing finances
Many people get engaged around Valentine's Day. Experts say that in addition to planning a wedding, they should also be talking about finances.
Abby Reed is an investment advisor who counsels couples. She encourages those newly engaged to have a very truthful, heart-to-heart conversation about money before the wedding. Better now than later when your first hard money talk may arise from a squabble.
"I really encourage people to be fully transparent before going down the aisle," she said.
The co-CEO of Reed Financial Group says transparency means sharing goals, revealing debt, learning differences, and discussing investments and paychecks. To make it work, both sides have to be very honest.
"With any relationship," she said, "transparency and trust in a relationship are the key to a financial conversation that maybe you haven't had yet."
What's next:
Put the meeting date on the calendar. Turn off phones and televisions, so there are no distractions. Now, here's the fun part - daydreaming together. You might find you both envision raising a family in the countryside is best. But you could also find that one treasures the idea of early retirement while the other wants to vacation a lot.
"If one person is all about saving for the future and retiring early, and the other is ‘you only live once’ and go on vacation all of the time, that can be a really different discrepancy. And there is going to have to be some compromise there," Ms. Reed said.
By the numbers:
At the next meeting, get to the numbers. Share your paychecks and investment accounts. Talk about student loan or credit card debt. Exhange savings and checking account information.
It's a time to learn to share your resources, Abby Reed explained.
"I don’t think having the same amount of assets or making the same amount, I don’t think that makes financial compatibility. Do you have a shared vision on what you want the rest of your life to be? It's not just about compatibility but adaptability."
Talk about financial roles in the marriage. Maybe one person focuses on the 401K while the other manages the day-to-day budget. Set a number like $250 that might trigger when a purchase needs to be agreed upon by both of you. Set up an appointment with a financial planner to guide you through the rest of your life.
Marriage is a lifetime of compromise, and this is where it begins. Make your distinct personalities work together.