June is one of the most popular months for weddings so whether: you’re A) getting married in June for the first or subsequent time, B) getting married this year but not in June, C) in a relationship and have no plans to tie the knot or like me, or D) you’ve been married for many years already, it’s also a good month to talk money.
Fact is, anytime is a good time to have money conversations with that special person in your life because it’s one of the topics we tend to avoid. It’s important, though, because how we spend and save can make or break a relationship. According to a study in the Journal of Marriage and the Family, for example, feeling that your spouse spent money foolishly increased the likelihood of divorce by 45 percent for both men and women.
“I recommend that women start talking about money on the third or fourth date,” says Robin A. Young, a certified financial planner in New York City and owner of Women Behaving Wealthy. In other words, the sooner, the better. But it’s never too late to discuss dollars and cents. Here are three key questions Young suggests women ask their significant other to get a better handle on the financial aspect of their relationship.
Do you maximize your 401K? This question gives you a sense of your date’s behavior with money and how prudent he is likely to be long-term. But it’s a good query for old married folks, too. I recently glanced at my husband’s pay stub and thought, Hm, does he max out his 401K? Like I said, it’s never too late to talk money and tweak.
What are our money goals? Asking this one leads to other questions, such as: How much should we contribute to our retirement accounts? How much should our emergency fund be? How much do we contribute to our children’s college fund (if you have or want kids)? And, how much should we pay for a home? (Young recommends spending no more than 25 percent of your net income on housing expenses.) “When it comes to money management, have a housing bucket, a kid bucket (if applicable), a fun bucket, and a savings bucket,” Young advises, then decide what percentage of your monthly income to contribute to each.
Where are we at with estate planning? Nobody wants to talk about death. Like money in general, it’s a tough topic. But avoiding discussing estate planning can be detrimental. For example, if you’re your husband’s second wife, you want to know that you’re the primary beneficiary on his life insurance policy and his retirement accounts, not his ex. It’s an easy oversight. These legal documents stand. “You can’t go to court and say, ‘but he really wanted me to have that money,’” says Young.
Don’t just talk money once and be done with it. Young suggests reviewing your financial goals as often as once a month to make sure you’re executing your plan and that you’re on track to financial happiness.