Photo: F Beloli – Italy
April is National Financial Literacy Month and, thus, this week’s column discusses something that needs to happen between committed couples before the number crunching begins: “The Money Talk.”
Ideally, this talk should occur before you consider cohabiting, marriage, entering into a Civil Union, or having children. Why? Because money is one of the leading causes of relationship stress and is the bane of most family feuds in estate planning. So, if you and your honey can get this straight before you tie the knot or start playing with grandkids, then your relationship monitor will probably hum right along, at least with respect to finances. Ergo, make a “date,” collect your documents – which are alluded to below – and after a good meal and a nice walk, have a seat and start talking. The following issues and questions provide a good start:
- Credit score. Here’s what the agencies have to report. OK, so I’ve had a few bumps in the road. What’s your score?
- Net worth. This is what I earn; this is what I’ve saved; this is what I owe. What’s your net worth?
- Financial planning. These are my current financial obligations. What are yours?
- Family obligations. Once a month, quarter, or year, I give Aunt Sue a couple of hundred dollars to help her out. Do you assist any family members financially?
- Charitable giving and gifting in general. Annually, I give approximately $______ to these charities? What about you? For holiday and birthday gifts, I generally spend $______. What about you? But you don’t have to tell me how much you spend on me.
- Baby Planning. Build. Feed. Clothe. Shelter. Educate: $200,000 for 4-year college tuition is the current projection for the year 2030. ‘Nuf said.
- Retirement planning. Presuming you’ve met with a financial advisor: This is what I’d like my retirement to look like and so this is what I’d like to have saved for retirement in 5 years, 10 years, 15… What do you want your retirement to look like and what are your plans?
Of course, this is just a suggested list that should be toggled so it’s not always starting with you and could actually start off with something akin to, “I’ve been thinking about going on vacation, but I also am thinking about retiring or starting my own business…” How start The Money Talk is important because admitting one’s financial boo-boos or bankruptcies is difficult; sometimes admitting that one is a trust fund baby who can probably feed the world three times over, build an international space station that would house China’s population, and that you have more cars than GM built last year can also be scary. But what is most important is that you start.
I know a couple who had it before marrying and still has it at least quarterly…
