For many couples, marriage is the beginning of a long, rewarding life together and one of the biggest relationship milestones one can reach. However, somewhere amid the romance, diamond rings and honeymoon, the big financial conversations are often lost.
“While talking about money may feel like a dampener to the excitement, a clear understanding of each other’s goals and approach to finances is arguably one of the key factors in staying together,” stated Jo-Anne Bailey sales director and country manager for Franklin Templeton Investments Africa.
Here are a few tips to get you and your partner started:
1. Discuss your financial goals: “When it comes to talking about money, the key is to discuss it sooner rather than later to ensure your goals are aligned. Discuss what is important to you both,” added Bailey. “For example, if one of you is saving to quit their job and travel the world while the other wants to rise in the corporate ladder and buy a house in the city, it may set you up for conflict later on.”
Many would find it surprising how few couples discuss whether or not they want children, discovering different views on this will have an emotional and financial impact at a later stage, added the investment company.
According to Bailey it essentially, comes down to the values you hold about retirement, education and what constitutes a good, successful life. “There are no right or wrong answers - it is simply a case of determining whether or not you are on the same page. While these conversations may be awkward at first and the opposite of romantic, they are well worth having before either of you even thinks of popping the question.”
2. Protect yourselves financially: “After the proposal comes two separate stages that have the power to set you up for life. In the past,[IC1] everyone automatically got married in community of property, but now it is possible to personalise your contract depending on your asset base,” explained Bailey.
Further, at this stage, it is important to remember that both partners not only come to the marriage with assets, but liabilities as well.
“Don’t rush this process or leave it to the last minute. Rather, find a family lawyer you trust and talk through all the options, so that both of you are financially protected in the event of death, debt or divorce,” advised Bailey.
3. Actual wedding planning: The next important stage is the actual wedding planning.
“As soon as you plan on getting married, you will be faced with an onslaught of products and services. Family members may try influence your decisions as well regarding the guests you invite or how much you spend,” detailed Bailey.
When couples buckle under this pressure and overspend, it can saddle them with debt at a time of their lives where they should be working on building their life together.
Bailey advises that you as a couple, consult a third party who will bring some perspective to the emotion of planning a wedding.
“A financial advisor will be able to give you good advice and build a plan that reflects the reality of your financial situation and your future goals. While this may require some discipline, as partners you will be able to support each other with your greater vision in mind,” added Bailey.
4. Ensure that you will be retaining financial independence: This greater vision can be both personal and for you as a couple. There is no need for you to combine all your assets. In fact, it is inadvisable.
“Ensure that you retain some financial independence by continuing to build your own savings, retirement and investment accounts. While many marriages are long, happy and successful, you need to have your own nest egg that will ensure that you are financially independent in the event of a tragedy or divorce,” Bailey added.
5. Avoid debt: “When the wedding is over, don’t be tempted to take out a personal loan or credit card debt to go on an enviable honeymoon. At this stage of your life together, this would only ensure that you start your marriage in a weak position,” suggested Bailey.
A strong marriage will last your whole life, giving you all the time you need to create the strong financial foundation that will allow you to experience many wonderful memories together.