Thinking of getting hitched? Learn about money and marriage from older investors.
Older investors advise couples launching a new life partnership to discuss their views on money and marriage, according to new Millionaire Corner research, that shows that older investors consider open communication the most important ingredient for a financially health marriage.
Marriage is a “merger” of more than just families, according to the Nehemiah Community Foundation, a non-profit based in Sacramento, CA, that aims to promote financial literacy. “Successful marriage partners make a financial commitment to share money, resources, and to manage their finances together,” said the foundation. “They talk about money, set up strategies and plans for saving money, budgeting and spending.”
The benefits of 20-20 hindsight have taught older investors – those ages 60 and above - that money and marriage are inextricably linked. More than three-fourths of older investors say the primary advice they would give a young couple is “outline financial goals, expectations and values prior to getting married,” according to a Millionaire Corner survey conducted in May. Younger investors – those age 40 and under – place less of a premium on talking about money and marriage. About two-thirds said they would advise a young couple to discuss finances prior to tying the knot.
What other tips do older investors have concerning money and marriage? More than half recommend a young married couple purchase a home “as soon as you are financially able.” Older investors are twice as a likely those 40 and under to recommend homeownership as a way to secure financially healthy marriage. The strategy is recommended by one-fourth of the younger investors. (Most affluent investors believe young couples should more emphasis on financially planning and less on a lavish wedding.)
The third most important step for a financially healthy marriage is premarital counseling, say older investors, who seem to understand better than younger investors that divorce and financial stress go hand in hand. According to the Nehemiah Foundation, “While you can’t totally prevent financial challenges, you can minimize the strain financial issues can cause on your marriage by spotting money problems early and immediately attacking them to prevent disaster.”
More than 40 percent of older investors recommend premarital counseling, compared to one-third of younger investors. Those age 40 and young over are more likely to recommend addressing money and marriage issues by living together before getting married to see whether “you are financially compatible,” according to our research. Less than one-fourth of older investors believes that living together is a good way to ensure a financially healthy marriage. (Many affluent investors recommended checking your future spouse’s credit before getting hitched.)
Older and younger investors do agree on one aspect of money and marriage: Delay having children until you are financially secure.