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Before exchanging rings, talk about the purse strings

March 11, 2014
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By  Richard M. Rosso

Learn more about Richard on NerdWallet’s Ask an Advisor

There are many things to consider when it comes to marriage, not least the topic of money. Conflicting money philosophies can wreak havoc on a relationship. You don’t need identical thoughts about all financial matters, just similar core values. Because if your relationship with money varies dramatically from that of your beau’s, you can be assured conflict will eventually tarnish the bliss.

You may scoff at these overtures; some may appear radical. However, before the rings, discuss the purse strings. These are the good or bad threads you’ll bring to a marriage tapestry.

Here are a few money smart steps to consider:

1. In lieu of a wedding, throw a debt-relief gathering. How romantic to slay one of the financial beasts of a successful long-term commitment. Forgo a wedding reception—throw a party for a quarter of the expense. U.S. couples spend on average close to $21,000 on their wedding. If both of you are saddled with revolving debt, such as auto loans or credit cards, it may be best to use gifts to pay them off or pay down debt. Throw a nifty party and focus monetary gifts on debt. Create a written promise to each other that debt monsters shall never arise from the dead.

2. Create your own series of make-or-break rules. If you’re truly serious, the matrimonial plans continue, are postponed or cease entirely based on jointly held money rules. Be specific when you create them. Here are examples:

  • If our individual credit scores are less than 700 (based on Fair Isaac’s), marriage plans need to be postponed until scores are at or above the national average of 723. Marginal credit scores can mean more interest paid on loans, including mortgage alternatives. Examine and follow steps to increase your scores on and revisit this commitment in six months.
  • I shall provide proof of my good money habits before the marriage commitment is madeGet ready for money vulnerability—break out your budget history, open the Quicken, show that you’re taking health care insurance and disability coverage at work. Divulge your liabilities (of the financial kind). Too much debt, lack of insurance and/or the absence of discipline may encourage you to reconsider a marriage at this time.
  • If individual monthly debts are greater than 25% of our gross monthly incomes, marriage plans need to be postponed until our debt levels are at or below 25%. I know, I’m taking all the heart out of this, and that’s exactly the point. As a famous Godfather once said: “It’s not personal, it’s strictly business.”

3. Write out your personal money philosophy and share it with your partner. If you’ve never formally considered a money philosophy, this is an opportune time to think it through. And you do have one—your money DNA has been with you since your youth, formed by your parents, friends and other outside influences. Share the details of this exercise with your partner, yet work on this project alone. The end result is a couple of sentences that spell out a sincere reflection of your ongoing relationship with money. Here are a couple that people have shared with me:

I’ve been afraid of debt for a long time and feel compelled to pay off debts quickly. My parents taught me to not dig a hole I can’t climb out of, and I’ve always been that way.”

“I always make sure to have money in an emergency fund. I always try to save at least 5% of my salary in my 401(k).”

These statements don’t need to be pretty. They need to be real and reflect an inner study about finances.

4. Consider money vows at the wedding. Really want to shake things up? How about a money promise as a tie that binds? I’m not kidding! Here are examples from couples who incorporated money messages in their vows:

“I promise to never make a big purchase without you.”

“I promise to never hide a financial mistake from you.”

“I hope for mutual respect and open communication if money issues arise in our marriage.”

You get the point. Seems romantic to me, but I’m a money guy.

What rules and tips can you create today around money and marriage?