VALENTINES DAY SPECIAL! We are bringing back this 2019 episode to highlight one of our favorite conversations about money and relationships. We talk with Meredith Goldstein, author and advice columnist for the Boston Globe’s Love Letters. Our conversation with Meredith is the genesis for one of our favorite fun questions – “brand name vs generic” which is a fun game you can play with your partner this weekend. This episode was one of our original episodes so please forgive the fact that we are all sitting in Katie’s living room recording this episode without fancy microphones or sound editing.
If you’re in a serious relationship and thinking about marriage, or you might already be engaged, take some time before you get married to talk money. You might find out that a prenup is right for you!
We will admit that the word “prenup” is very taboo word especially when it comes to love and marriage. As such, we wrongly assumed prenups are just for Kardashians or the Real Housewives. In our episode with Casey Rose Shevin, she explained why some couples opt for a prenuptial agreement.
88% percent of Americans think it’s important to have financial conversations before saying “I do”, yet only 51% actually discuss how to handle finances as a team before getting married. Even more shocking, only 41% of married couples disclosed their annual salaries before getting married and only 36% disclosed their debt! The millennial generation is taking their turn getting hitched and, like so many other things, upending the status quo by opting for premarital financial disclosures. Holla we want PRENUPS!
A prenuptial agreement, or a prenup, is a legally binding contract you sign before you get married. If you get divorced, your prenup outlines how you’ll divide assets and debts. You can sign a prenup that is pretty much all encompassing, leaving little to be negotiated at the time of divorce, or you can limit the prenup to address only a single asset or circumstance. For example, if one partner is coming into the marriage with a significant amount of student loans, a prenup can outline that in the event of a divorce, that debt remains 100% with the partner that took out the debt.
Marriage can be the biggest legal binding contract that people enter into. Prenups are created during a time of love, with a focus on the future. A prenup can actually prevent a contentious split because it forces you to think ahead about one of the top sources of stress in a marriage – money. Financial conflict is the leading cause of divorce, and taking the time to focus on this before marriage can strengthen your financial partnership with your spouse.
For more information, check out our episode with Casey Rose Shevin, a family law attorney and mediator.
We’ve interviewed many experts who agree that it’s important to talk money with your partner. One of the top sources of stress in a marriage is money so taking the time to focus on this before marriage can strengthen your financial partnership with your spouse. Getting married means sharing your money with your spouse. And when you’re used to managing your own money, even the thought of sharing it with someone else can be confusing, stressful — even scary. Banking with your spouse doesn’t have to mean entering into a world of conflict. Power couples bank together in a way that allows them independence while operating as a team.
Before you start combining money, it’s lay all your cards on the table. Shannon McLay, founder of The Financial Gym, calls this “getting financially naked” with one another. Talking money is personal and getting to this level with a partner is intimate. Everyone is bringing baggage to the table. It can be stressful and uncomfortable but ultimately helps better align your goals as a couple. What do you want to save for? Where do we see this money going in our future?
Bank Accounts with Benefits? Don’t be afraid to start small! Some couples who are living together, engaged or married consider setting up an “ours” bucket for finances. This could be a shared account or shared credit card. Determine how much each is contributing and set up a monthly transfer to the account.
This works really well when the individuals want to maintain independence while still easily managing shared expenses. It helps the couple to manage the shared budget for things like rent, household items, eating out together, etc. And most importantly, it keeps pre-marital money separate for things like student debt, if one partner isn’t prepared to take that on just yet.
We love talking about money and relationships! Check out our episodes on aligning financial goals with Lindsay Bryan Podvin.