3 Things You Should Keep In Mind About Fiancés and Finances
Love and marriage are two words that more often than not go together. And yet, finances is another variable that couples must consider seriously before they pledge to a lifelong commitment.
If you are thinking of going into a longterm relationship or are already in the middle of one, here is a must-read list of tips about couples and finances.
1. Find your financial match
According to Charles Murray in his piece, “Advice for a Happy Life”, timeliness, cleanliness, and frugality are the three critical commonalities for a successful union. While these attributes may seem minor in comparison to hobbies or political beliefs, they are quotidian conversations, meaning, they come up every day. They’re the quintessential “everyday struggle”.
So, if you are tight with money, then it behooves you to marry someone also tight. If you like to regularly treat yourself, having to convince your partner of every little luxury– will be exhausting. Choose your financial match to avoid weekly arguments.
If you’re not feeling convinced, consider that finances are the number one cause of relationships stress. In the words of Muhammed Ali, “It isn’t the mountains ahead that wear you down. It’s the pebble in your shoe.”
2. The worst-case scenario
Eating brownie batter, with its raw eggs, is a fun game of Russian roulette. While adults love to warn about the dangers of Salmonella, the bacteria is actually not that common. Turns out, only about 1 in 20,000 eggs are actually infected.
In the case of marriage, however, about 40% end in divorce. If you’re a couple below age 25, then the odds jump to 60%. So, marriage is a much more daunting game of Russian roulette.
To keep the odds in your favor, it may be helpful to talk with your partner about the worst-case scenarios. What are deal-breakers? How would you strive to behave in a break-up? How would you attempt to cooperate?
Emotional trauma aside, being able to work as a team in divorce can save you thousands. Of course, it will be hard to act logically so remember that the average cost of divorce is around $20,000. If this makes you ill, then talk preemptively about an “uncontested” option, where both of you agree to the terms. By avoiding expensive litigation, you could save around 80% of sunken divorce costs.
See Also: 5 Divorce Mistakes to Avoid Right Now
3. Income & tax sharing
Couples manage finances different ways. It is generally thought, however, that merging accounts & assets is the best way to inspire mutual trust and accountability. Furthermore, it’s simply easier to keep track of.
For newlyweds, however, it may take time to arrive at this place of trust. Therefore, it’s possible to do the process slowly, with each party adding money into a shared fund until everything is merged.
In the same vein, it’s important to decide if you’re going to file taxes jointly or separately. Honestly, there are only a few reasons to file separately, such as deep medical debt. Otherwise, it’s not worth the extra time.
Adjust your W-4 tax forms with your respective employers, so that your little family isn’t underpaying in taxes. For a married couple that both work, it’s likely that each of you should claim one allowance, or one of you claim both and the other, none.
While it’s hard or seemingly impossible to contemplate an end to a relationship when you’re just starting out, couples should also make preparations and arrangements for their future to head off potential rows and fights.