As another June wedding season comes to a close, couples everywhere soon will realize that the wedding may have cost a lot, but their new spouse is priceless.

According to the Institute for Divorce Financial Analysts—yes, it’s a real organization—money issues are the third leading cause for divorce, behind basic incompatibility and infidelity. It seems many couples are caught off guard financially, once the honeymoon is over and The Rest of Your Life has commenced.

What is a newlywed couple to do?

First, they could consult a financial professional—someone like Polly Reynolds, CPA, Vice President & Trust Officer for The Trust Company in Columbia, MO. “You have to have these conversations before making the commitment. If you’re not on the same page, you’ve got to get those issues worked out before walking down the aisle,” she said.

Katie Seay, CFP®, CTFA, Vice President and Director of Financial Planning for the Trust Company, concurred, saying that  honest, open communication is key to getting off on the right foot.

“When you get to a serious point in your relationship—and that’s going to be different for every couple, whether it’s moving in together, or getting engaged—you need to be able to slide everything across the table, and say, ‘OK, here’s my credit card debt, here’s my savings, my student loan obligations,’ and be willing to share that information.”

Lucy Williams, CFP®, Vice President & Trust Officer in The Trust Company’s Manhattan, KS office, is mother to a newlywed son and a daughter who is in a long-term relationship. She agrees with Reynolds that full disclosure must take place before the marriage. “If one partner resists discussing their financial situation prior to the marriage,” she noted, “are they trying to hide something? If you decide to buy a house or a car, it’s going to come up in a credit check.”

The bottom line, they say, is communication, communication, communication.

Surprise, Sweetheart!

In addition to being clear about shared goals, such as buying a house, paying off debt, or starting a family, each partner should have a solid understanding of the other’s financial big picture, so there are no surprises after the big day. But what if that doesn’t happen? Is the marriage doomed from the start?

 “Nobody walks down the aisle thinking that they’re going to get divorced. But if a surprise does happen, be calm, be smart, and put a plan together,” said Reynolds.

“The first thing is to not judge,” commented Seay. “Figure out where the issue is coming from. Listen to see if they have a plan in place to get the debt paid off. Be willing to make some changes if you’re the one who’s bringing the debt to the table, especially if it’s credit card debt due to a spending habit.”

Seay also suggested potentially seeing a marriage counselor who has some financial background, or speaking with a Certified Financial Planner™ professional. If the couple does not have a budget in place, this would be the time to create one, and agree to stick with it.

For long-lasting financial trust, both partners should be willing to make some compromises. Seay added, “As long as you have open and honest communication and are willing to work on things together, there’s probably a solution to any financial concern.”

Opposites attract: Spender v. Saver

Still, based on divorce statistics, it appears that there may be other sources of unexpected financial friction, even if full disclosure happened before the marriage.

All three advisors agreed that the greatest source of turmoil is having both a spender and a saver in the relationship.

“Money can be a huge source of turmoil,” said Reynolds. “If couples don’t budget and you have a saver and a spender, you can run into problems when one partner unknowingly spends money that’s allocated for other things.”

Seay added, “Where the rubber meets the road is, can you find that happy medium, where both feel like they’re able to fulfill their needs? Because the spender is fulfilling needs with those material things or experiences, and for the saver, seeing the bank account rise is what gives them fulfillment.”

Again, the key is communication—having open and frequent conversations about budgeting, spending and saving habits, common financial goals, and the couple’s progress toward meeting their goals.

Williams commented that with good communication, partners on opposite ends of the spend/save spectrum can actually be good for each other. “If one partner likes to spend money, but their partner is a more conservative spender, they may balance each other out,” she said.

 

Parental Guidance

This brings us to the age-old question, what role should parents play in their married children’s financial lives?  

“On both sides it’s important for the parents to be supportive, but the couple needs to define their family and their situation, and that takes some time,” said Seay.

It’s a big transition from being engaged to being married, from the perspective of adding extended family, and all the interpersonal dynamics that they bring. Someone who is used to sharing everything with her parents now must think about her spouse’s relationship with her parents. It’s not the same level of relationship that a child has with his or her own parents. Newlyweds should keep this in mind and be careful not to over-share, out of respect for their partner’s privacy.

Likewise, parents should be respectful of their child’s relationship with their new spouse, and be careful what advice they give unsolicited. “If my daughter asks me a financial question, I ask if she’s spoken with her partner about it. I think she needs to look toward him, and then come to a consensus, rather than first looking to me,” advises Williams.

Parents can become a source of friction in a new marriage by causing a wedge between the married couple—unknowingly, sometimes. Williams added, “Both of my kids know they can ask questions, but if it’s something that affects their relationship, I have no problem telling them that they need to work it out by themselves. I like my kids’ partners! I don’t want to be disrespectful of their relationships.”

Williams advises parents, “Let your kids know that you’re always there for them without having the purse strings tied to them, so they can learn to independently deal with their finances.”

The Bottom Line

Ultimately, the best thing that parents can do to prepare their children for financial wedded bliss is to lead by example and start teaching them about money at a young age. They should have discussions about finances, savings, budgeting, and prudent use of money long before their child finds a partner.

Conflict involving money may be inevitable, but couples who vow to respect one another, compromise, and communicate openly and honestly, stand a decent chance of not becoming a divorce statistic—of the financial variety, at least!