Marriage is a Contract, Not Just Love
The Evolution of Marriage
If you go back a century or so, you’ll see how different marriage was than it is today. Recall the dowry? A dowry was the gift of money or property a woman had to bring to her husband in marriage. In essence the marriage was a financial exchange and the amount of the dowry told a man how much “value” his new bride had. Somewhere along the line marriage changed. Throughout the 20th century, people began marrying for love. Though that may sound romantic, it also brought about heightened divorce rates that skyrocketed throughout the later part of the century. People are getting wise to the potential deceptions of love and once again turning to the idea of a marriage being a business transaction.
Marriage is a Business
It may not sound romantic, but marriage is a business. There are a few things to be aware of these days when it comes to nuptials:
- How does each spouse feel about saving?
- How does each spouse feel about spending?
- Will there be a joint account or separate accounts?
- Will there be a house account in addition to separate accounts?
- How much should be given to charity?
- How much should be put into retirement?
- How much should be put into college funds?
- How much should be in the emergency fund? When should it be tapped into?
These are just some of the questions every couple on the verge of marriage needs to address. It’s imperative that there is some commonality in the answers, even if they don’t match. Can you live with a spouse who wants to save 12 percent of your paychecks when you want to save 10 percent? Probably. But if your spouse is accustomed to only saving three percent, you may have a problem.
The Prenuptial Agreement
Should you get a prenup or not? Granted, this is another “unromantic” issue, but if marriage is to be looked at as a business, it’s a necessary one to discuss. The trend today is for couples to wait until they’re older to wed. That means, in general, that there are more assets between each to distribute if the marriage doesn’t work out. Having a plan set in place before problems arise is the perfect idea for any couple. Remember that calm, rational and fair discussions between couples who are on the verge of breaking up are rarely had. Emotions fuel difficulties.
Preparing Your Financial Marriage Agreement
To prepare a financial marriage agreement, look at the following list:
- Find out your financial starting point as a couple. As painful as it may be, pull up your credit reports and discuss them. Figure out a strategy to fix any problems and pay off debts.
- Create a savings plan to reach financial goals. For example, if a couple wants to buy a starter home in three years, then they need to figure out how much to save starting now. A good financial calculator can estimate how much needs to be put away into savings.
- Figure out who is going to be in charge of everyday finances. In every marriage there is one person who pays bills and expenses and oversees the monthly bills. Of course major decisions are done together, but there is no reason for both partners to pay the electricity bill together.
- Learn to work out conflicts with finances. Inevitably there will be issues that arise that create differing opinions. Be committed to listening and compromising when it comes to money.
In the end, marriage is a financial blending of two entities. Knowing what the strategy is to move into the future is an important one. All couples should sit down and have an honest discussion about what their goals are and then find ways to reach them together.