Matrimony and Money Matters
Happy wedding season! Each year, wedding season comes around and brings joy, celebration, and new beginnings. Whether you are walking down the aisle, or attending the union of friends or family, weddings are often more than just white dresses and parties, they are a time that encourages tough conversations about money, with spouses, family, and friends.
Tying the Knot and Tying Finances
Getting married can be one of the most impactful transitions of your life. Entering a new phase of life with your partner also brings financial changes. And your financial actions—from falling behind on repaying a debt to landing a higher-paying job—will affect your spouse. So, before you walk down the aisle and uphold the vow “for richer or for poorer,” take the time to have those tough conversations about money and learn about your spouse’s financial goals, challenges, and plans.
Discussing finances with your partner goes beyond a ledger of assets and expenses. While it is of course important to know the inflows and outflows of funds, as well as the debt and savings in your household, understanding your spouse’s feelings on and approach to money is just as critical. How people view, spend, and save money is an emotional part of that person, and knowing your spouse’s views can help strengthen your partnership.
If talking about money seems overwhelming, it doesn’t have to be done in one conversation. Check in with each other, and your finances, on a regular basis to track your spending and savings objectives. Working with a financial planner can help you build and adjust your financial plans, and help keep you on track to reaching your goals.
Gathering Generations
One of the most amazing things about weddings is how they gather families together – grandparents, parents, aunts, uncles, children, cousins, and beyond. This can be an opportunity to set a time to discuss finances across the generations, even though that can be a tough conversation.
No one enjoys talking about death, but having a plan in place when a loved one passes and communicating that plan is important to ensuring their heirs are able to execute their wishes. Having open discussions with your parents or your children is the best way to minimize stress after an individual’s passing or incapacitation. An estate plan including wills, trusts, power of attorneys, etc., can help prevent any disagreements, protect assets, and ease the complications that come with a loss.
It’s also prudent to discuss whether they expect to pass on any assets to their heirs and to review the ramifications of certain types of inheritances, especially retirement assets. For example, most non-spouses who inherited a tax-advantaged retirement account after 2019 must deplete it within 10 years of the decedent’s passing (or face a penalty), which may push the recipients into a higher tax bracket.
Especially when managing transitioning larger estates, consider working with a financial planner, tax professional, and attorney. Experts can not only make sure that accounts are managed correctly, but also serve as a resource to all generations.
Even rain can’t put a damper on a wedding day!
Friends and Funds
Having been a bridesmaid in a number of weddings, I can attest that standing beside a dear friend as they marry their partner is a wonderful and magical time. But it can also be a very expensive one. There are expectations of bridal showers, bachelorette parties, matching dresses, hair, makeup, and more. Those costs can add up quickly, with bridesmaids expected to spend on average $1,900, which does not include travel to and lodging at the wedding.
As is the case in all relationships, the key is communication. Being a member of the bridal party does carry sometimes significant financial obligations. Take the time to evaluate if those costs fit into your budget, and don’t be afraid to have an open and honest conversation with the bride. There are ways to show your support for your friend and their marriage without compromising your financial well-being. On the flip side, if you are a bride, be sure to consider the budget of others as you plan your event. It may not be worth excluding your close friends because an extravagant bachelorette party is not in their budget.
Talking about money with friends, both in and out of the wedding setting is tough and prioritizing your personal financial goals by setting boundaries can be a difficult discussion. A good friend will understand and won’t try to push you beyond that point, especially if you bring a few suggestions for alternatives that are in your price range!