Wednesday, April 24, 2013
Questions to Ask Your Fiance Before Settling Down
There is no divorce in the Philippine law, but couples do fight about money and also one of the reason for a couples separation (legal or illegal).
Getting engaged is such an exciting time in a couple's lives. Besides planning for their wedding reception, where to live, how many kids or in-law visits; couples should importantly discuss a very personal topic before getting hitched. That is the topic of "finances."
Look to the left, with the statistics like that in America, we can say that there is a greater need for financial planning between engaged couples to lessen heartaches and quarrels in their married life in the future.
An article my friend sent on my email talks about this issue which inspired this blog. Lauren Gadkowski, a financial planner in Covington was quoted saying: "Talking about money doesn't mean you are going to fight about money. But if you don't talk about money, then that's where the problems begin."
The author of the article, Jeff Opdyke, said that there are 9 important questions that a a couple should ask one another before getting married. I will place them below and write my simplified insights:
1. What are your financial assets and liabilities? --> This may seem a big question, but to couples who are practicing an all honesty relationship, this should be easy to answer. It always helps to disclose everything about your financial status. It's OK to say you have none when you really have none because a person with aspirations and goals will one day have more assets than he has liabilities.
2. How do you use debt? --> Ah... now here, there are a lot of young people that I know of who has more credit card debt than educational loan. Knowing such things about your partner will help you gauge if your are marrying a person with the right priority or not.
3. What is your money history? --> Are you marrying someone who comes from a family of spenders or savers? Determining this before marriage will really help you know what certain money adjustments you will have to make when you are already married.
4. Do we need a pre nup? --> Trust issue is the main issue in a pre nup. Some people think getting a prenuptial agreement between both parties is an insult. Jokingly, I would consider pre nups like a term insurance policy. If something goes wrong in a marriage and both parties would consider separating, then one or both of them would benefit from the pre nup's protection.
5. What are your financial aspirations? --> Short term plan, medium term plan, and the long term plan. How much money would you want to have in your bank account in the next five years? Would you want to retire comfortably or you can't retire at all because your lifestyle can't afford it?
6. What are your career expectations? --> You will know from your partner whether there will only be a single income earner in your family or both of you will have to participate in bringing more income at home.
7. How do you propose we divide financial duties? --> Discuss with your partner what your strength's are, both of you can decide who will handle and budget the money that comes into your family and where to allocate it. In my case, my husband gives me all of his salary, I in turn give him his allowance. The caution he provides me is this: "You have all my money, but if you make any debt that is not in our plan, do not take it out of our joint account! Whatever your debt is, it's yours to pay."...Understood Sir!
8. Will we operate from one checkbook or three? --> If you operate in one checkbook, all your saving and expenditures will be coming in and out of one source. If you have three, you can set aside a joint account considered as an emergency fund while each of the spouses will have a separate account for each of their discretionary purchases.
9. Do you have a basic understanding of money? --> People that are in love are always on a dreamy state. But getting in the bonds of matrimony will make you wake up. One day or the next you will live a a world which will either make you sad all the way through or happy for eternity. If you have an understanding how certain financial vehicles work, like insurances, checking accounts, and credit card, you have an advantage. Storms of life will come, whether that be an accident, illness or disability. Will your attitude and knowledge about money help in creating happy family relationships in spite of all these, or would it ruin it?
There is a notion that says, "Love will conquer all, even the smallest indifference." Though this statement may be true; I say, "There are only four things that can happen if you don't discuss important matters such as finances in your engaged bliss. You can, a.) talk about it when you already are stuck for good anyway, there's still room for improvement; b.) complain how bad your spouse is in managing your finances throughout your marriage; c.) get a divorce or annulment; or d.) suffer in silence throughout your marriage."
Whatever your decision is, remember that in relationships money is not important but saving it can secure your future. I say "best of luck!" to our financial decisions in life; And if you're already getting married soon and reading this, "best wishes!"