Being engaged can be one of the most exciting times of a person’s life. There is a ton of excitement and anticipation for making a life together with someone who also loves you and wants the same.
Money, understandably, isn’t at the forefront of many people’s minds at this time. After all, we all know that life is about much more than money, and this is certain one time when we’re thinking of more important things.
But money sometimes gets overlooked, and related issues sometimes get swept under the rug by couples who are engaged. Paying attention to money-related topics, while not obsessing over them, can actually be really healthy for a couple. They can also help them start life together on the same page and in a prosperous situation.
Hopefully, a couple won’t make the money mistakes when dating that we explored earlier, and will instead focus on the solutions discussed. Along those lines, here are three money mistakes and solutions for those who are engaged:
Focusing Way too Much on the Ring
Okay, so this is something that I think many will disagree with. I do understand that a ring is a big deal, and yes – I didn’t exactly behave frugally when buying a ring.
The thing is, I think some folks can go way too far. While perhaps this is all a matter of preference, and maybe I’m going too far here, I think that people that go overboard to buy a “dream” ring are displaying seriously misplaced priorities.
In writing about how much to spend on an engagement ring, there were a variety of different responses. Some really interesting comments were made in post on not liking your engagement ring. Some people view this as something worth spending just about anything on, while others don’t need (or want) something expensive. It’s that first group that I find puzzling.
Anyway, the notion that someone should spend 2 months of income on a ring seemed workable back in the day, but now I realize that this can be difficult for a lot of people. Why not focus on the relationship itself, and be happy with a ring that’s good enough?
Solution: don’t’ worry about some marketing-driven guidelines on 2 months salary for a ring, and don’t confuse some piece of jewelry for the actual relationship itself. If you someone will only love you based on what you spend on them, or if you’ll love someone less if they don’t purchase what you want, then it’s time to revisit priorities. Think about balancing tradition and “wants”, with practical considerations of starting a life together and “needs”. And, of course, the relationship itself.
Draining Savings or Going into Debt for a Wedding
Yes, a wedding is a big deal. But is it worth spending $40,000 for one day, even if it’s The Big Day?
I think that many couples can happily be married for a modest amount south of $10,000. This actually might be extravagant for most, and truly there are people that can have a great wedding for much less.
Yet, there are people that throw common sense out the window when it comes to weddings. As if having everything perfect as if it was a dream come true is worth draining all savings and then some. Some people even borrow money for weddings, which seems to be a nice way to start out married life with the pressure of having to pay back debt.
We can’t get something for nothing, and quite often the dream comes with a massive price tag.
Solution: Spend what you can truly afford without borrowing money or draining a big percentage of savings. Keep things within budget, and think about the opportunity cost of that money. Instead of spending $40,000 on a wedding and borrowing $15,000 to make it happen, a couple could instead just spend $10,000 and have $15,000 in savings instead.
Not Sharing Financial Information
It’s crazy how people can enter into what’s essentially a legal agreement with another people, where income and some assets are shared, yet not know anything about the other’s finances.
What if two people get married, and one has massive debt or other issues that he or she didn’t tell you about? Wouldn’t that impact your life a great deal? It seems naïve not to discuss such things, and almost shady to avoid sharing negative information.
On the contrary, some people might have a good deal of money but don’t want to share that information ahead of time. The idea might be that they want the other person to value them for who they are, and not what they have. The thing is, the other person might exhibit different behavior when they find out the truth later.
Solution: sit down with the other person, and have an open and honest conversation about money. Share information on assets, liabilities, and income. Not because that’s what defines you or the relationship, but because it’s fair to do and can be best for both people long-term.
My Questions for You
What are your thoughts on these possible mistakes and solutions that engaged couples can make?
Do you have any examples to share?
Do you have any other mistakes/solutions to add?