We want to believe it’s love that makes the world go ’round, but cash also has something to do with it. Money shouldn’t be a taboo topic for a new couple; in fact, it’s important to have an open dialogue early on, says Kathy Hankard, a certified financial planner in Verona.
“There’s no right or wrong way to merge finances, as long as communication comes first. A couple needs to sit down and have an honest discussion about how each person views money,” Hankard says. For example, it’s important to know your beau’s history. “Did he have an allowance growing up? What sort of example did his parents set? Did he put himself through college? You have to know where your future spouse is coming from,” Hankard says.
Besides looking at the past, couples need to look to the future too, says Elisabeth Norton, a relationship and business coach with A Really Big Life, Inc., based in Madison. “Think long-term. What are our goals? A house? Children? There are a kazillion ways to manage money in a relationship, but as long as it is handled with integrity by both parties, money should not interfere with a couple’s happiness.”
There are plenty of options for merging finances. Some couples both contribute to a joint account, if both parties are “on the same page, financially,” Hankard says. A more typical arrangement is a joint account plus individual accounts, so each person “can have a little mad money to spend, no questions asked.”
Remember, though, no one way is right or wrong. Honesty is what’s crucial in keeping a new couple on the path to monetary and marital bliss.
Prenuptial agreements
Many couples neglect to address the legal aspects of property ownership in marriage that will be important far into the future, which is where a “prenuptial” or “marital property” agreement might be in order. Understanding who owns what property in a marriage (like real estate, income earned, or bank accounts) becomes an important issue for Wisconsin couples because Wisconsin is one of the few “community property” or “marital property” states. In Wisconsin, unless a couple agrees otherwise in writing, all property is jointly owned by each spouse regardless of whose name is on the title or account.
Marital property agreements are especially important when one party comes into the marriage with a much higher income or significantly more assets than the other, and in situations where the couple does not want to own everything 50-50. Marital agreements are also critical when family heirlooms (anything from antique jewelry to vacation property) are meant to stay on one side of the family.
According to attorney David Gorwitz of Hal Harlowe & Associates in Madison, six months before the wedding is a perfect time for couples to get their marital legal affairs in order. “When everyone’s happy and thinking rationally is the best time to sit down with a lawyer to work out a marital property agreement and other important marital documents like wills, health care powers of attorney, etc.” While a marital property agreement can be drafted just before the wedding, a lot goes into the process and it must be overseen by an attorney. Which is why, Gorwitz says, “it’s wisest to get this planning done early, before getting too wrapped up in the more fun wedding details.”