Getting married in the near future? Congratulations! As you discuss songs for your first dance and destinations for your honeymoon, it’s important to talk about some heavier matters–money.
“The gap between those who believe it is an important discussion and those who actually have the discussion is sizeable and can negatively impact their financial confidence,” says Joe Sicchitano, head of Wealth Planning and Advice Delivery at SunTrust. “Some may be hesitant to reveal poor past decisions or may be concerned that financial details could change the landscape of the relationship. Whatever the root cause, avoiding the conversation doesn’t change reality. Regardless of the past, couples need to discuss the financial reality of the present in order to plan successfully for the future.”
According to SunTrust, millennial couples are more willing than other generations to break down the barriers and discuss their finances:
Debt: Forty-four percent of millennials disclosed their debt compared to 39 percent of Gen X and 33 percent of Boomers.
Retirement: Millennials are more willing to discuss the amount of money they have saved for retirement (28 percent) than Gen X (18 percent) or Boomers (14 percent).
Homebuying: Before getting married, 56 percent of millennial couples discussed whether they would rent or buy a home together compared to only 38 and 39 percent of Gen X and baby boomers, respectively.
“Millennials are marrying later in life than previous generations,” says Sicchitano. “Many of them have accumulated assets and experience managing their finances before marriage, so they bring maturity to discussions that they may not have had at a younger age. Millennials have also come of age with social media and are more accustomed to sharing details about their lives. It’s not surprising that this generation is more likely to discuss their finances than prior generations.”
SunTrust offers the following tips to help couples engage in the money talk before walking down the aisle:
Make a “financial registry”: Successfully managing your combined finances starts by conducting a full inventory. Documenting your assets, including checking, savings and retirement accounts, as well as your liabilities, such as student loans, credit card debt and car loans, allows a couple to see where they stand today so they can start to plan for tomorrow. Do the same with your incomes and expenses, asking questions like: What will our combined picture look like? How do we want to make decisions together moving forward?
Discuss your money goals and challenges: Decide on your agreed-upon priorities before the big day. These can be difficult conversations, but they are important in shaping your financial future. Working with an advisor can often ease the discussion, serving as a neutral party on topics where you may disagree.
Take baby steps: You don’t have to make every financial decision right away. Agreeing on a few financial decisions can start a couple on a path to good financial habits. Whether it’s agreeing on annual retirement contributions or saving for a home, planning together allows you to start the marriage with financial confidence.
Regularly renew your “financial vows”: Make financial discussions a regular part of your lives. Use the time to see how you are tracking against your goals, review priorities and uncover any concerns with your money habits. Schedule these dates as often as you need to stay on track, but at least twice a year.Source: Suntrust
Published with permission from RISMedia.