Finances in Marriage: Mediating Money to Stay Married

This two-part article is all about money—money and its role in our marriages. The first part of the article will focus on dealing with money in first marriages. The second part of the article, to be published next month, will focus on money issues occurring in marriages in later life. Why money? Isn’t marriage all about love, common interest and goals, caring for, and about, each other in sickness and in health? Of course, marriage is about forming a union, entering into a relationship in which each member can find happiness. Yet, all too often, marrying couples steer clear of money and money- related issues until they are forced to confront the subject when something “bad” happens—one loses their job, health expenses cannot be covered, debt looms, as just a few examples. It is indeed surprising to many, that in fact, they know very little about their spouse’s finances now or when they married. There are exceptions:

Couples who execute prenuptial agreements know each other’s finances, at least at the time of marriage. Interestingly, if they do not engage in joint management or oversight of finances, they may not be aware of each other’s finances over time. And, of course, couples who pool their moneys and participate, by themselves or with financial advisors, in handling investments, are at least aware of the size of their estate. They may or may ot know how each one spends money.

This article is intended to highlight the importance of understanding your family’s money in the very context of the marital relationship. We, at the Centre for Mediation & Dispute Resolution, suggest that mediation offers a confidential and insightful vehicle for helping married couples to expand their knowledge base—to learn to share information, to plan together for the present and future use of finances, to learn how to be prepared for unanticipated assaults on assets, and most of all to demystify money, so often shrouded in secrecy and fear.

Here are a few ideas to consider:

• Prior to marriage, couples should, as if they are doing a prenuptial agreement, exchange information on:
• Their assets, including, but not limited to, bank accounts, retirement funds, investments
• Their salaries, base income and variable income (e.g., bonuses, stock compensation)
• Employment perks such as matching retirement funds, health care plans, disability and life insurance
• Anticipated inheritances and gifting from relatives
• Prior to marriage, couples should discuss their dreams for the future:
• Do they want to have children
• Do they want to travel and if so, what is their bucket list of places to see
• Do they want to own a house, stay in the state where they reside
• Do they dream of acquiring certain luxury items (e.g., expensive sports car, jewelry)
• Do they want to retire early

Prior to marriage and periodically during marriage, couples should discuss:

• Should they pool their incomes and, if not, how will incomes/expenses be handled
• Should each spouse have separate funds and, if so, is it the same amount and should usage be defined
• Should they budget for expenses and /or savings
• Should they put funds aside for unanticipated events (e.g., job loss)
• Should they retain financial advisors
• Should they have life insurance and/or wills to provide for the death of one spouse
• Should they limit use of credit cards and or debit cards (each spouse should have credit in individual names)

Open and collaborative discussions of money and money-related issues need to be an integral part of each couple’s relationship. Circumstances change over time and couples may also need to change their goals or approaches to the creation of wealth and the usage of money. The ability to speak openly and frankly about money, without fear of marital repercussions, is a key ingredient to building and maintaining the marital relationship. Obviously a “healthy and open” approach to financial well- being is not a guarantee of marital happiness, but it does, at the least, provide the mechanism and information necessary to having informed discussions about finances. We, at CMDR, suggest that mediation with a skilled and knowledgeable mediator may help couples to deal with money and money-related issues in an environment focused on communication and problem-solving. Most of all, mediation provides a means to fashion a plan for the couple to take over and own together decision-making and control of finances.