Before You Say 'I Do,' Admit What You Own and Owe
In the wildly successful Crazy Rich Asians, the movie adaptation of Kevin Kwan's best-selling book with the same name, we meet socialite Astrid Leong. She spends millions shopping in one afternoon and is the picture of a confident woman who knows her place under the sun.
But in the following scene, we see her arriving at home and asking the household helpers if her husband is around. When they say no, she instructs them to take all her shopping bags and hide them in drawers, cabinets, and shelves to keep him from discovering her recent purchases. Later we learn that her husband knew about the shopping and the hiding places all along, and he throws this fact in her face as they agree to go their separate ways.
There’s a lesson to be learned here, and it’s not about being frugal in your shopping.
Keeping money secrets from your spouse or significant other is never a good thing and will eat away at your relationship.
Money is a sensitive – sometimes even taboo – topic for many couples. Carol*, 28, admits that she finds it easier to fib about the costs of her purchases to her long-time boyfriend Noah.* “I don’t want him to think that I spend too much on clothes and bags. I work hard so I also want to reward myself while I still can.”
People like Carol often avoid discussions about money because they fear their partner’s disapproval, or worse, anger. But for couples who want to have a future together, talking openly and honestly about money is something they need to do, and better now than later.
Here are some rules for the road that will hopefully lead to your financial harmony.
1. Honesty is the best policy.
Ideally, you will have the money talk as soon as you two agree a wedding is in your future, or that you are committed to each other for the long term. Be honest about what you bring to the table. Do you have any loans? Maybe you own a condominium unit but have many more years of mortgage payments ahead of you. Or did you rack up credit card debt when you were younger and so any borrowing you make in the future will bring that up? Did you invest in a term insurance that will earn you a lump sum payment in a few years, enough to own a comfortable home? It’s time to lay out the good, the bad and the ugly.
2. Draw your money roadmap.
Now that you know your Point A, discuss what you want to be your Point B. Maybe she plans to move overseas in pursuit of greener pastures for her career. Maybe he wants to invest in a house next door to his parents. While a roadmap can have many stops–that is you can probably invest in that house and also travel a few years later–it still needs to make one stop at a time. Talk to your partner about your priorities and make compromises that you two can live with.
3. His, Hers, and Ours.
Make sure to also give some thought as to how your savings and investment accounts will be organized. Belle,* 45, shares that she and her husband agreed early on that she will handle all their accounts. This is why she holds her husband’s ATM card where his salary is deposited every month. As the household account manager, Belle is responsible for paying all the bills, as well as setting aside funds for their children’s education, family vacations, and even retirement savings.
This arrangement may not work for everyone, and Carol especially balked at the prospect. “When we marry, Noah and I will likely have one joint account for our family expenses but I plan to maintain my own account and my own money. I am not sure if I will tell him though, and it depends if he plans to also keep his own and whether he will tell me about it.”
4. Agree on your ‘hard’ limits.
Back to Astrid, hiding purchases can only lead to trouble. Suggest you agree on an amount where any purchases up to that limit can be made without checking in with each other. In the event that the hard limit is breached, own up to it right away. If you breach it too often, maybe the hard limit needs to be negotiated? Or you could have a spending problem that also needs to be addressed stat.
5. Keep the communication lines open.
Once you open the door to money discussions, it is easier to keep it going. Over time, you may need to switch roles and it’s time for the other to take the lead in handling the finances. Maybe your priorities will change so you need to redraw the money roadmap. If you feel keeping your own financial account a secret has to stop, raise that with your partner. With frequent dialogue, you can also share your partner’s money habits that you don’t support, for example buying a new mobile phone every three months.
Maintaining healthy relationships are hard enough, so don’t complicate it by bringing money problems to the mix. Even if you have a rocky start to your money talk, work out compromises that you will be able to keep. Sharing a financial life may not be easy, but if you keep working until you have a plan that works, that’s one sweet investment.