By Hanniz Lam
When I got married, we didn’t have any financial plans in order. We just fell head over feet, dated many, many years and got married after much grumbling from my mother. We didn’t talk about long term plans and took things in stride.
I think younger people are smarter today. They’re more aware about themselves, how to spend or save or invest, what questions to ask each other before getting married.
Talking about money expectations to your fiance/fiancee is important.
There’s a good reason for this: Money and stress very often go hand in hand, whether it’s because of an overextended budget, an unexpected financial emergency, or even the discovery of your spouse’s secret credit card. And financial issues don’t discriminate — they can unravel marriages between wealthy couples and couples in major debt alike.
All I knew then was that we would stay together in a place his parents had previously rented out and we would cover the bills, the quit rent, the assessment bill, and maintenance bills.
We thank our lucky stars to be able to save on rent.
Here are some financial issues that can tear a couple apart:
Opposing attitudes towards money
Few couples actually take the time to really understand each other’s views on spending and saving.
If one partner spends without thought and the other frantically saves every sen, there’s bound to be tension. The spender may feel that his or her partner is constantly nagging and cheap, while the saver may feel vulnerable to the effects of overindulging.
When hubby and I were dating, it was natural to share the bill or take turns to pay so there weren’t any grudges about who pays more.
Mismatched financial priorities
It’s important to identify financial priorities before getting married.
If you don’t identify major shared goals — like buying a home or traveling to an exotic new place — it can create problems down the line, since you won’t be working simultaneously to save toward the same goals.
Also, if one of you has already bought a home and have been paying for it, you need to discuss your plans on having your spouse moving in with you. Do you plan to continue to pay for it under your name or will your spouse contribute half and not mind not having his/her name to it?
Another thing to be clear about is what is perceived to be an emergency. Different people have different perceptions of an emergency.
If you plan to share an emergency fund, you wouldn’t want to be caught unawares when your partner uses the fund to buy contact lenses instead of paying an overdue electricity bill, for example, as that for him, is an emergency.
Credit card debt
If your fiance has racked up about RM100,000 in credit debt before being married, how will you approach this matter?
Will you let your spouse apply for a credit card in your name?
Just like the sexual kind, financial infidelity can have devastating consequences on trust and honesty.
Examples of financial infidelity include secret bank accounts, undisclosed debt, hidden purchases, or gambling addictions.
Overextending their budgets
When two people get married and combine incomes, they may feel financially powerful, but then make a series of poor purchasing and spending decisions that put them into debt, regardless of how much money they’re making.
This can put a serious strain on a relationship.
“In fact, people who make six figures are often in debt because they tend to spend more of what they make,” Andrea Woroch, a personal finance writer said. “The biggest example is buying too much house. If most of your monthly income is going toward affording your dream home, then you have little flexibility to enjoy other activities or outings that you and your partner enjoyed doing together, like traveling.”
Woroch suggests that whether you’re taking on a mortgage or renting a home, aim to spend no more than 25% of your combined take-home pay on this monthly expense.
“This gives you more flexibility in your lifestyle and alleviates the financial tension with your spouse,” she said.
Inability to compromise on spending
Although it may be impossible to ever get on the exact same page, learning how to make compromises is key to keeping a healthy and happy marriage.
For instance, maybe you don’t want to spend money on going out to eat all the time as your partner would want, but giving some room in your budget for the occasional date night can make both of you happy.
Major impulse buys
Whether you’re in a comfortable financial situation or in a dire one, most couples would agree that major buys should be done as a couple.
My husband’s dad was once sent to buy a loaf of bread and came home with a newly bought van. This obviously pissed my mom-in-law off as they were a relatively young couple, growing their family and holding on to their purse strings.
Stress from combining bank accounts
Remember, you do not have to combine your assets in a marriage — it’s a choice. Sometimes it’s a good choice, and other times it’s not.
Depending on your circumstances, there may be significant tax and financial advantages to maintaining separate accountants.
If you’re thinking of investing in something together, a combined account can be a good idea. Of course, this needs to be tracked together closely and contributed to fairly.
Unexpected major expenses
Another cause of divorce is stress and disagreements over major unexpected expenses.
These could include caring for an elderly relative, medical emergencies, major home repairs, or unplanned travel. It could also include child-related expenses that weren’t agreed on by both parties.
If there’s not an agreement on schooling — private versus public, for example — these financial stresses can easily lead to divorce.
Loss of financial control
Issues of financial control can surface in a couple of ways. The most common is when a woman is made to feel marginalized because of her perceived lack of contribution or influence in building family wealth.
Talking about money shouldn’t be a topic of conversation on a first date. But you should make it a point to communicate on the topic the moment you know you are serious and committed as a couple.
Addressing those conflicts well — and resolving them — can help strengthen the relationship prior to getting married.