The importance of a pre-marriage ‘money date’

Rachel had been married for a few years before she started realizing something was “off” with their finances. The couple seemed to have plenty of money, but she never got a straight answer anytime she asked her husband questions about their money. Finally, she discovered that her husband had been sloppy about paying bills, often procrastinating past the due date! She had always managed her money well, and she was proud that she had earned a good credit score. However, all that was likely to change, as now she was potentially liable for some of his money problems. She wondered, “How could I have been so naive to not ask some questions sooner?”

As the careless bill paying in this hypothetical example illustrates, your clients and their future spouses must discuss their financial positions as an initial step in striving toward shared goals. Having their inaugural “money date” beforehand is preferable to heading to the bank to open joint accounts, only to discover that one partner falls short of meeting the minimum credit standards. If this happens after they are married, it will certainly set the tone for their first money conversation!

It’s easy to understand why some engaged couples don’t make time to talk about their future finances. If they are feeling insecure about their knowledge of financial matters, it’s hard to admit that to their fiancé, so it’s easier to just assume things will all work out. Additionally, talking about finances during the excitement of wedding planning might feel like a “buzzkill.” Scheduling a money date and combining a fun activity like dinner with the less enjoyable money talk can ease these concerns and make prioritizing the conversation more appealing to both partners.

Research suggests that married couples enjoy various physical and mental health advantages compared to their single peers, such as increased life expectancy and self-reported happiness. However, these potential benefits can be overshadowed if financial problems arise. It’s crucial to recognize that entering into a marriage can expose each party to potential financial liabilities. In states following community property laws, creditors can go after both spouses for one partner’s debts incurred during the marriage, creating shared financial liabilities. While the situation is somewhat better in common law states, there’s still a potential concern that is best avoided.

In a recent CNBC survey, 64% of couples admit to being “financially incompatible” with their partners, meaning that they have different views on spending, saving, dividing financial responsibilities, etc. If you don’t talk these things out from the start, they can grow into larger issues over time. I have worked with many divorcing couples whose marriages had started great, but over time, they had built up resentment about how financial decisions were being made (or not made). In some cases, it got so bad that they each began to commit various forms of financial infidelity, including hiding purchases and money from each other. It was at this point that communication completely broke down, and they began telling their friends that money issues were the reason for their pending divorce.

The first pre-marriage money date

Here’s what advisers can recommend to clients about having a money date:

Location. A fancy restaurant isn’t necessary, especially if it might strain your finances. Your money date could be as simple as sharing popcorn on the couch or going to your favorite pizza or coffee spot. Some suggest a “clothes optional” money date for a candid financial discussion, but a better choice is a relaxed time when you both can focus, perhaps during a Saturday morning walk with your dogs. Walking and talking can be a great way to initiate the conversation.

The first money date question. The first question sets the stage for the rest of the questions, and it shouldn’t be about your money. It should be about how you think about money.

Start your first money date by delving into how money was managed in your respective families growing up. Was money openly talked about? Did your parents argue about money? Who paid the bills? Did you save for purchases, or were they just put on the credit card? Did you have to work for your spending money, or were you given what you needed (or wanted)?

Much of what we think is the “right” way to handle money is nothing more than “that’s how we did it” in our family growing up. We never really stop to think about whether it is the best way. Since opposites attract, it would be unusual if both parties had the same view about money. Many times, one person tends to be a saver and the other a spender. As long as both people want to improve their finances (and their relationship), then the money date can work. Take it slow and just try to make progress.

All cards are laid face up. The first money date is the time to be candid about where you are financially. You may think you are not very organized financially, and that’s OK. You may be embarrassed about a bad financial decision you made in the past and are still paying for, and that’s OK too. Full disclosure and honesty are the requirements for any money date.

No hunting allowed. Sometimes, the initial financial disclosure can be difficult if it means you must admit to your future spouse that your finances are different than they thought. If you are the person hearing this difficult news, don’t use this disclosure as a chance to lecture the other on how to make better financial decisions. They took a risk to disclose this to you, so show appreciation for their courage in sharing. Look at it this way, would you rather they didn’t tell you and you found out after you were married?

Establish a 50/50 talking/listening rule. Recognize that one person might naturally prefer discussing financial matters more than the other person. If you’re the talker, make a conscious effort to listen actively, and if you’re the listener, share your thoughts. Approach the conversation as if you’re hearing your spouse discuss money for the first time. Avoid manipulation, and aim for an authentic dialogue where both perspectives are heard and considered. This sets the stage for a genuine and constructive financial conversation.

Being humble and having fun

When your clients get in the rhythm of having money dates, the questions and conversation will just continue to flow on their own. They will want to share their current account balances, loans, credit scores, etc. From there, they can talk about their goals to establish an emergency fund, reduce their debt, save for big purchases, and set their long-term plan for when they can retire. They will need to dive into their spending to make some decisions, but when they do these things together, it will feel so much easier than if they were doing it alone. They can set some celebration targets to reward themselves for hitting a milestone. There will still be lots of hurdles to get over, but as they start to see progress, the hurdles will look smaller.

They will have accomplished the huge step of having their first money date. Now they should commit to each other to keep their money dates going, as the long-term benefits to their finances and relationship will be worth it!

For additional planning tips, listen to the AICPA PFP Section podcast episode “How to Reduce Overwhelm for Your Clients.”

— Dave Stolz, CPA/PFS, CFP, CDFA, is a financial planner who enjoys working with couples to help them accomplish their shared financial goals. He is the author of Women, Divorce and Money: Taking Control of Your Finances and Your Future. To comment on this article or to suggest an idea for another article, contact Dave Strausfeld at David.Strausfeld@aicpa-cima.com.