Newlyweds and Money

A couple of weeks ago Judi and I attended a wedding held at the aquarium at the Omaha zoo.  As we walked through the aquarium we passed large tanks filled with colorful fish.  The penguins had already tucked their heads under their wings for the night.

This aquarium has a tunnel which allows fish to swim above and beside the fascinated guests.  As the wedding started, the bride and groom took their place at the end of that tunnel.  During the ceremony we looked past the couple to see sharks hovering overhead.  The pastor resisted exploiting the obvious for comedic gain.

The Center for Marriage and Family at Creighton University sits down the street from the Omaha zoo. Several years ago the Center conducted a study of couples early in their marriages: “Time, Sex, and Money: The First Five Years of Marriage.”  They discovered that newlyweds typically struggle with three issues—the balance between work and family, frequency of sexual relations, and financial matters.

Premarital Counseling

My wife, Judi, and I have met with numerous couples for premarital counseling.  We recently discussed what we’ve observed in the couples we’ve counseled in the past few years.  We noted that most couples have talked very little about finances before they come to us.  They typically don’t have a financial management plan.  They have yet to articulate clear financial goals.

We’ve observed that young people these days tend to have a low level of personal finance literacy.  In general, they have little understanding of investments, retirement planning, the role of insurance in a solid financial plan, the appropriate use of credit, etc.  Most of the people we work with just don’t know the basics of establishing financial security.

Debt is a major issue for some. After undergraduate and graduate study, student loan repayment concerns many couples.  I’m alarmed with the consumer debt some bring into a marriage.

We’ve noticed that the bride and groom often come from families that differed in the way money was handled.  The parents of one might be rescuers, quick to bail children out of tight financial situations, while the parents of the other might use their children’s financial stress as a teachable moment, or just ignore it.  One study attributed 82% of what a person knew about personal finance as being learned in the family of origin, yet most families talk very little about finances.

Financial Issues

The approach to a conversation about financial issues in premarital counseling is two-pronged.  First, we facilitate the couple’s conversation, hopefully as the beginning of a lifetime practice.  Second, we teach basic concepts about personal finance and suggest ways they can continue learning.

With a couple, Judi and I help them probe the differences in their financial personalities.  Discussion is stimulated when we ask a question like “Are you a saver or a spender?”  Or we might ask them to describe their gift-giving practices.  When do you pay the bills, promptly or at the deadline?  If you buy something for yourself, what do you tend to spend money on and where do you shop?  Understanding how the other person is “wired” can assist in building a team approach to financial management.

We stress communication skills in the premarital counseling we do.  Transparent conversations strengthen a marriage; money secrets will inflict injury on a relationship and sometimes be fatal to the marriage.  Couples need to talk about cash flow: income and regular expenditures.  They need to review their net worth together: what they own and what they owe.  Judi and I have an intentional conversation about our own finances each quarter; couples should do so at least once every six months.

After 33 years of marriage, I look back and now realize how little we knew when we started out.  Many couples—maybe most—are not totally ready for marriage on the wedding day.  This may be especially true concerning financial issues.  In premarital counseling we attempt to build an awareness of financial issues, then encourage continued learning.  When a couple begins married life with this basic understanding, they will better navigate financial waters sometimes teeming with sharks.

Originally published by Pensions & Benefits USA.