Money Mistakes Engaged Couples Make

by TTMK on August 25, 2014 · 4 comments

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?

{ 4 comments… read them below or add one }

Kasia August 25, 2014 at 3:22 pm

I think it’s important to stick to your own individual budget. If you’re earning six figures and you’re comfortably spending $40K+ for a wedding by all means go for it just don’t get into debt for it. I was reading an article only yesterday about a study that found couples who had bigger weddings were likely to have a happier and longer marriage. The report can be found here http://nationalmarriageproject.org.
Bigger usually means more expensive and honestly I can’t agree with this study. There are simply too many other factors involved in a successful marriage.

Ring wise, I’m female so to me the ring is important but not that important. We had a very unromantic proposal, my partner and I decided we wanted to get married, we looked for the ring together and I found one that suited his budget and my taste. It’s delicate but nice and yes I’ll probably want an upgrade to a bigger diamond which would be the ring of my dreams once we are very financially comfortable. Right now there are more important things to think about and couples need to realise that a ring is not worth spending all your savings on at the beginning of your relationship. Invest time and effort in your relationship first and later on when you have more money and more sense you can splurge.

A friend of mine married young, I think she was 21 at the time. She didn’t like her engagement ring he proposed with so they upgraded to a bigger one. They had a big wedding, 100+ guests, very fancy, beautiful actually, it was a great day and night, a little bit expensive. Two years later they were divorced. It’s probably not related but the size of your diamond or your wedding does not demonstrate the size of your commitment to one another.

When you first get engaged it’s easy to get lost in the excitement and get carried away. Enjoy being engaged for a while before planning the wedding. This will give you time to cool off a little bit and plan with a calm head and hopefully a realistic budget in hand. Make sure you talk about it too. Don’t just assume that your fiancé wants the exact same thing as you and besides communication is one of the most important factors of a successful relationship.

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TTMK August 26, 2014 at 5:48 pm

Thanks for the thoughtful comment. You have some really good observations, and I really like how you note that people would be best served not assuming that your fiancée wants the same thing as you – and that communication is incredibly important. Very true, and this is applicable to finances and so many other things. Have to also add that your example of the friend who married young and had a expensive wedding is a very good one in terms of money not equating success (or prospects of success).

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Elstad September 2, 2014 at 7:12 am

Couple finances is a tough area. One is lucky if they can get a partner whom they see eye to eye on finances…or more specifically, frugal partners. Wedding and ring pitfalls can be avoided with a modicum of foresight…failing to share financial information might be the death knoll for a relationship.
It goes to the issue of trust, opennness and being there for each other…if one of us is in debt, I would want to know and then we can work out a way to resolve it.

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Ben May 13, 2015 at 2:06 pm

Couple finances is a grey area that needs to be discussed with care. I noticed that many of my friends and colleagues getting engaged and carried away with the whole process that they forgot about what the wedding was actually about as well as mistreat friends and family. There are plenty of instances of couples buying elaborate decor, vendor locations, and bridal jewelry just to have it go to “waste” when they get divorced a few years down the line. Like the aforementioned person above me said, money doesn’t have much to do with your commitment to one another and their dreams/wishes. Paying for a “cheap” ceremony and all the included works could just be as glamorous and memorable as one that costs an exuberant amount.

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