We see agreements throughout the Bible in the form of covenants, treaties, and decrees.  One such decree was signed by King Darius which led to the events commonly referred to as Daniel and the Lions Den:

All the governors of the kingdom, the administrators and satraps, the counselors and advisors, have consulted together to establish a royal statute and to make a firm decree, that whoever petitions any god or man for thirty days, except you, O king, shall be cast into the den of lions.  Now, O king, establish the decree and sign the writing, so that it cannot be changed, according to the law of the Medes and Persians, which does not alter.”  Daniel 6:7-8

The Bible also says with all thy getting get understanding, so the act of drafting and signing ordinary contracts is supported.  However, the pre-nuptial agreement is a different animal.  A prenup, by design, is a contract enforced if the preceding covenant is broken. This proceeding covenant being that of marriage which is made before God.

Contract vs covenant

On the surface, contracts and covenants may seem the same.  Sometimes the words are used interchangeably.  However, closer inspection reveals that while both involve at least two parties entering into some sort of agreement, the covenant involves God.

The sacred vows are usually something like for better, for worse, for richer, for poorer, in sickness and in health, until death do us part. A prenup does not compliment this model.  It places conditions on what was meant to be unconditional.

Common reasons for getting a prenup include:

• A huge difference in wealth between partners
• One earns more than the other
• One partner has high debt

The problem is these all place emphasis on material things.  While logically it may make sense to want to protect your assets, the Christian marriage should strive to be an example of Christ’s love for us.

Have you not read that at the beginning the Creator “made them male and female,” and said, “For this reason a man will leave his father and mother and be united to his wife, and the two will become one flesh”? So they are no longer two, but one. Therefore, what God has joined together, let no one separate.   (Matthew 19:4-6)

When two become one, it is no longer “my assets” and “your assets” but “our assets”.

Statistically, the divorce rate is around 50%.  This increases in cases of re-marriage or blended families.  It is no wonder there is often a desire to protect your assets before marriage.  However doing so shifts trust away from God and into your own hands.

God’s design for marriage is 100% unity and commitment.  If there is any insecurity, it’s time for a heart check:

• Is it is lack of trust in God or my partner?
• I’m I still hurting from a bitter breakup and I don’t want to go through that again?
• I’m I overprotective of material possessions?

Dave Ramsey used to be 100% against prenups, however he notes there are rare instances when they are necessary.  He says:

If you don’t have over $3 million, you don’t need a prenup. If you’re worried about who gets the china cabinet, then give them the china cabinet…

You need to be able to combine your life with someone that you marry. The only reason I back off the pre-nuptial agreement deal at the higher dollar amount is that they tend to attract fruit loops from within their family who appear when some money shows up.

It should be noted that no where does the Bible state that a prenup is a sin.  Nor is it an indicator that two individuals do not love one another.  However, it is not the best representation of God’s plan for marriage and the unity of two including their money.

What do you think?  Are Prenups OK for Christians?  Are they a way to protect your financial interests or a bad idea?

10 Smart Personal Finance Tips Before You Get Married

1.  Get everything (all financial matters) on the table

Probably the first thing to do is to sit down and tell each other absolutely everything about each other’s finances.  It may just be best to schedule the conversation when it can be uninteruppted timed together.

Do you have a lot of debt?  It’s okay.  You might as well talk to your future spouse about it now because he or she will soon find out.  This is often a trust discussion.  If you’re having trouble here, definitely follow step 2.

2.  Go see a financial counselor

How did it go during your first conversation about money?  Eve if it went well, and certainly if it didn’t go so well, I recommend going to see a Christian financial counselor.  The counselor can help you get things organized and determine your next step in merging your finances together.  Yes, merge is the key word here because marriage, after all, is two people becoming one!

3.  Set up your first budget

Once you know what each person is bringing with them to the relation ship in terms of income and expenses, you should be able to sit down and draft your first budget together.  Have a plan for how things are going to start working once you return from the honeymoon.  It’ll reduce a lot of stress just knowing how you’re going to operate together financially each month.  And if you want to start a family in the future, consider working towards living off one househould income.

4.  Stop spending on credit now

The last thing you want to do is face spending challenges.  Learn something from step 3 and put yourself on an individual budget immediately.  Just because you have a plan for when you get married, doesn’t mean you can’t follow one now.  Don’t spend more than you have each month to avoid wrestling with credit card debt and spending issues when you get married.  If you already have credit card debt, your monthly marriage budget should include a category for paying that debt off in the first 1-2 years of marriage.

5.  Begin saving for emergencies

Having a plan to save for emergencies should have been the primary goal for my wife and me before we got married, but it was probably the farthest from our minds.  If you can start putting back some money now in your individual budgets and then combine it together when you’re married, you’ll be on the right path to reducing the risk of using a credit cards for emergencies in the future.

6.  Learn about Biblical financial stewardship

Probably the most important thing you can do is to learn more about God’s plan for money.  Crown Financial Ministries offers a Biblical Financial Study that helped us understand God’s perspective on managing money.

7.  Identify the family CFO

There is typically one person in the relationship that possesses the desire and skills to organizing the finances, paying bills and tracking expenses.  Who is this person going to be in your relationship?  Decide now who’s going to manage the numbers and be responsible for keeping the other person informed.

8.  Have a plan to pay off car loans

Many couples will enter into marriage with two car payments.  If you’re serious about getting out of debt and being in a better financial position when you’re ready to start a family, make sure paying off your cars is a part of your debt plan.  Once they’re paid off, commit to driving them until the wheels fall off.

9.  Identify your next Money Map destination

With some many things to think about (emergency savings, getting out of debt, creating a budget, etc.), it can get to be a little overwhelming.  So, get a copy of the Money Map and identify where you are and also your next destination.  Make sure you’re focusing your all your attention on that current goal.  But also know the next step and when you you’ll get there.  As long as you’re following your plan, you’ll make quicker progress than you think.

10.  Plan your wedding on a budget

So, put all that talking and planning into practices and make sure your wedding doesn’t leave you with a big financial mess to clean up when you return home from the honeymoon.  Are you responsible for paying some or all of your wedding costs? If so, you can definitely plan a wedding on a budget.

So there you have it, 10 smart money tips before you get married.  If you put these tips into action, I can tell you, you won’t be sorry.  And you can focus on the fun part of marriage, enjoying your new relationship together.

What do you think about these tips?  Do you have ideas for helping young couples get their finances in order before marriage?  If so, please let us know about them in the comments.

Who should be resonsible for managing money

Organizations face challenges around the uncertainty of work tasks because of the lack of understanding of who should be responsible, held accountable, consulted and informed for those tasks.  Families face these same challenges, but with tasks associated with maintaining and managing the family finances.

• Who should pay the bills?
• Who is ultimately accountable if the bills don’t get paid on – time?
• When experiencing financial challenges, who should the husband and wife seek for counsel, or consult with before making a big decision?
• Who needs to be kept informed about spending, upcoming expenses or the state of the finances in general?

Squash the uncertainty around money management responsibility

To squash this uncertainty, which can lead to frustration and disorganization, organizational teams will typically use a work matrix to identify the person(s) responsible, accountable, consulted and informed.

Why couldn’t the same be used for home finance management?

I recently had a conversation with someone about applying such a tool for family finances.  “What a great idea”, I said!  Perhaps this post is enough to start the conversation for husband and wife.  Consider these questions to help bring clarity to family personal finance management.

Responsible for money management

Who is responsible for managing the family finances?

The responsibility of paying bills, managing cash flow or actual expenses against the spending plan is typically that of the family CFO (Chief Financial Officer).  There is typically one person in the relationship that is more gifted in this area than the other.  Most often the person will naturally assume the role. 

It can get confusing when more than one person tries to assume the role, so I’m a fan of having one joint checking accounts and letting one spouse maintain it.

Accountable for money management

Who should be accountable to the financial decisions of the family? 

Both spouses should be accountable for all spending decisions and management of the finances.  How is it possible to be responsible for the management of the finances if I’m not the CFO, you might ask?  You have to be informed as you’ll read below.

It’s also important to note that each spouse should hold the other spouse accountable for their decisions.  In marriage, you become one and so do the finances.  Therefore, each person is ultimately accountable to the state of the family financial picture.  I think a good step in this direction is to have a joint checking account in marriage.

If you’re a Christian and you follow Biblical financial principles, you understand that God holds you accountable to His principles.

Consulted for money management

Who should provide counsel for the family? 

You definitely have to be watch out for some financial counselors you choose, but every husband and wife should have some counselors they can seek for advice and direction when it comes to making big financial decisions.  The counselor can also provide help or even accountability for the monthly spending plan.

Seeking counsel first from God and His word should be a priority for a Christian.  Certainly husband and wife should seek each other for counsel in making decisions.  Friends, family and a financial counselor can also be good sources. 

Make sure when you do seek outside sources for counsel, you are going to those counselors together versus one spouse alone.  Remember, personal finance is a family matter and it will separate you in this area if independent counsel is sought after.  This is a common mistake when husband or wife seeks the counsel of their parents independently.

Informed of money management

Who should be informed about financial decisions? 

This is a common area of issue that needs more definition for a husband and wife to communicate well about money.  In the post, Talk about Money, I wrote about the need to have a weekly meeting to discuss financial matters.  If you’re the CFO, you should be keeping the other spouse informed of the state of affairs on a weekly basis.  Both spouses should inform one another of spending decisions and upcoming expenses that impact the overall spending plan.  

Speaking of keeping each other informed, there is no room for secrets when it comes to family personal finance.  Hiding spending, extra money, etc. is a serious issue that can impact trust in the relationship.  I’ve heard of many friends situation in which one spouse has a credit card without the other person knowing about it.  It’s not usually surfaced until the balance becomes so unmanageable that the other spouse finds out.  At that point, a lot of negative emotions about the situation can impact or break up a marriage.

Final thoughts

I think almost any family personal finance task can be run through the areas of responsible, accountable, consulted and informed to help bring more clarity to managing family finances.  And more clarity and communication is always a good thing to make sure husband and wife are walking together in the personal finance management.

What are common challenges with family finance management that needs more clarity around who should be responsible, accountable, consulted and informed?

It’s my money argument

Some argue whatever amount of money they earn with their job is their money. They typically take responsibility for paying some of the bills (usually divided equally with the other spouse), but the rest of their paycheck is for them to use in whatever way suits them best.

Become one in your finances argument

Others argue that once you’re married you become one in your finances. This camp will tell you it doesn’t matter the source of the income (your check or mine), it all gets deposited into one account and we manage it together.

So, what is the right answer?

Having a joint checking account

Well, since my wife and I got married we’ve had one account. I can tell you this has worked quite well for us. I’m the family CFO (who would have guessed), so once the checks are deposited, I pay the bills, etc.

We make this work because we each have a virtual envelope of money every month in which we get to use for spending money and clothes, so there is never discussion or concern about one of us spending more than the other.

We also do our best to make time each week to talk about money so that we can make sure we’re on the same page regarding expenses and how we’re managing our finances.

As you can tell, my wife and I are definitely in the camp of having a joint account. I try to encourage couples who are learning to manage their money to think about this approach and consider that once they became married, they also became one in their finances.

Other reasons to to a joint checking account

Prevents overspending

Having the money in one account can help prevent over spending. Each spouse can hold the other accountable to spending decisions when reviewing account statements. This is an important act of stewardship if you’re a Christian.

One account to track and  balance

You only have one checking account to track and balance. Having multiple check cards (if you use them) and statements is too much to keep track of in my opinion. Keeping it simple is a usually a good approach given it’s difficult to stay organized when life gets busy.

Visibility to money

Both spouses have visibility to the money. I recommend having a family CFO, but both spouses have responsibility to know the status of their finances. I think this becomes more difficult with two accounts individual accounts each person manages.

Even though I’m strongly for the joint account, I can’t say that I’m right. However, I do think there are more compelling reasons to have one account. I think it’s fair to say that each couple needs to work together to find the approach that allows them to conduct wise personal money management and to be a good stewards, if thinking about money from a Biblical financial standpoint.

What are your thoughts or experiences with single or joint accounts?