Marriage is a Partnership, and Love is part of a Contract
The Evolution of Marriage
If you go back a century or so, you’ll see how different marriage was than it is today. You remember the dowry? A dowry was a cash gift or gift of property a woman brought with her into her marriage – which is code for what she essentially was sold for by her parents. In essence the marriage was a financial exchange and the amount of the dowry told a man how much “value” his new bride had. The definition of marriage changes as time goes by, and there is little that objectively defines the word. Throughout the 20th century, people began marrying for love. It might sound romantic, but side effects included higher divorce rates that only climbed as time went on and now are over 50%. 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 either person 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 you put towards retirement?
- How much should be put into college funds?
- How much should you put in the emergency fund? When should it be utilized?
These are just some of the questions every couple on the verge of marriage needs to address. There must be consistency 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. If your spouse is accustomed to only saving three percent, there might be 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. Today, the trend is for couples to wait to marry until they’re older. This shows that a general sense, there are more assets between each to distribute if the marriage dissolves. Have a plan in place before problems arise is the best idea for people in general, and doubly so for couples. 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.
- Start a savings plan to reach your goals. For instance, a couple wants to buy a starter home in three years – they must figure out how much to save as of NOW. A financial calculator can show you what you need to put away.
- 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. Obviously, major decisions must be made together, but there’s no reason for both people to pay the utilities together.
- Learn to work out conflicts with finances. There are going to be issues that you will have differing opinions on, period. Commit to listening, and also to compromise on money issues.
A marriage does blend the finances of two people. Knowing the strategy is to move into the future is important. All couples should sit down and have an honest discussion about what their goals are and then find ways to reach them together.
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Tags: charity, college fund, finance plan, marriage, marriage contract, retirement