Finances FYI Presented by JPMorgan Chase
By Aaron Allen
The Seattle Medium
Marriage is a major milestone. Planning for a family and what you want your financial future together to look like is a significant step that couples should consider before tying the knot. This conversation can help you and your partner gain an understanding of what it will take to build a life together.
According to Eli Taylor a banker with J.P. Morgan Private Bank, transparency and communication are key factors when partners are discussing their lifetime commitment to each other. The conversations around financial compatibility are a sensitive matter, but Taylor believes that being open and honest is crucial to the “health of any partnership”.
“Use the time before getting married to begin thinking about your finances,” says Taylor. “While talking about money can feel anything but romantic, the financial foundation you set before tying the knot can help you and your partner build together for a lifetime.”
“Being in a committed relationship can change how you spend, save, invest, and plan for the future. But financial compatibility between two partners is rarely achieved without discussing what money means to each of you, including the ‘money messages’ you received growing up,” continued Taylor. “It took my wife and I years to figure out a perfect solution, and we still make tweaks every now and then. So do not think of your financial planning as something that is set in stone. The key is to have open lines of communication, have a plan and also understand that as you grow, as life situations change, that you have planned for that growth as well.”
One of the most important things that Taylor says couples should take into consideration is determining how they’ll share expenses, which involves discussing how much each partner earns and how they can contribute to their expenses.
“Couples may have different strategies for managing their finances,” says Taylor. “None are right nor wrong. It just depends on each individual in the relationship and their individual preferences.
“I think about if partners should consider if they are going to combine all of their assets into one joint account or into two separate accounts and delegate who would be responsible for what bills, or maybe a combination of both,” added Taylor. “It is possible that you may try multiple methods until you find one that works best for your unique situation.”
Being honest about any financial baggage is another subject couples should take seriously when planning a life together. Any debts that each person brings into the relationship should be discussed, and having an independent third party or financial advisor could serve the couple well during these conversations.
“I believe that with any serious commitment in life, whether it’s a career, purchasing a home, or a car, there are certain elements of your life that you’ll have to share, and some may be personal experiences,” says Taylor. “I think that applies to marriages and relationships as well. I advise that any financial obligation that comes into a relationship should be disclosed. Student loans, credit card debt, and financial liability should be discussed because these obligations could delay your ability to buy a home, start a family, or make certain career and life decisions.”
“I think it’s important to have someone come in, a financial adviser, because sometimes it is difficult to discuss these personal, very closely held topics,” he added. “It is good to have a trusted financial planner as a soundboard to help talk about the sensitive topics of financial planning.”
Taylor also says that it is important for couples to discuss and agree upon their top financial goals in order to develop a savings and investment strategy that has input from both parties.
“Talking about your financial priorities and goals and aligning them with your savings and investment strategies I believe is key to getting your marriage of to a strong start,” says Taylor. “Considering those priorities, do you want to save for a home, pay off loans first, or are there any other large expenses on the horizon, like paying off the expenses from the large wedding you had. I think it’s important to have an ongoing cadence to discuss your financial goals, budgeting and planning.”
Taylor says that it is important to discuss short and long-term aspirations as well. Whether or not either of you are considering going back to school or a career change. If you are considering having children or already have children, and how you will manage childcare and other educational decisions. Do you expect to care for an aging family member are all things that should be disclosed and taken into consideration.
The ability to navigate the financial terrain as a partnership is vital to the success of marriage. Taylor says that being open and transparent about your current finances, financial past and philosophy can help you prior to and during your financial journey as a family.
“Making your personal finances—past, present and future—an ongoing part of your life together can help you weather disagreements about money,” says Taylor. “Explore how your views on money were shaped by your upbringing and your family’s approach to spending, saving and investing. Don’t shy away from talking through financial disagreements, as they often represent deeper divisions that can affect your entire relationship.”
There are countless decisions that couple must make during their lifetime, and the sooner you begin talking about your finances and financial expectations the better equipped you both will be to plan your future together.
Finances FYI is presented by JPMorgan Chase. JPMorgan Chase is making a $30 billion commitment over the next five years to address some of the largest drivers of the racial wealth divide.
