Today isn't just the official start to all that good cheer -- it's also the kick off to peak engagement season in this country. According to wedding industry statistics, the period between Thanksgiving and New Year's is the most popular time for couples to buy a ring and get one big step closer to formally sealing the deal.
But before you jump up and scream YES -- and certainly before you say "I do" -- every modern woman should think long and hard about writing a prenup to protect herself in the event that the marriage doesn't last forever.
That's right; I said every woman. No exceptions.
First of all, women are staying single longer and getting married later. According to the cover of this month's Atlantic, the median age for marriage is even higher for affluent and educated women. And last year, nearly twice as many single women bought homes as did single men.
Hear any alarm bells yet? Because I do.
Today's wives-to-be are more sophisticated about personal finance than any other group of brides in the history of marriage. They're saving in 401(k) accounts, putting themselves through school, buying condos, and launching careers (sometimes, multiple times over) -- all before choosing a mate. But that means women are entering their married lives in a very different position than even those 15 years before them --and they've got much more to lose from a money standpoint if the marriage fails.
And let's be honest, ladies: if you can't talk to your fiancé about writing a prenup now, you're in for a pretty rocky ride ahead. Almost ten years after my own wedding, I can safely say, money plays a major role in our daily life together. There are household budgets, mortgages, monthly bills, babysitters and tax returns to contend with. So my advice is to get real comfortable talking finances with your fiancé -- way before you walk down that aisle.
Whatever you do: don't let all those tiny lights and tinsel cloud your vision this holiday season. Think sensibly about what a financial union means today, and how your marriage could impact your earnings and your nest egg. Here's what I tell clients:
Protect your property
Don't overlook the ten or fifteen thousand dollars you may have in your retirement account or that down payment you scraped together for your first apartment. Both are assets you've worked hard to accumulate. In today's rough markets, you never know how long it could take to earn that kind of cash again.
Think of a prenup as an insurance policy, so that if things do go south, you aren't in a worse financial position than you would have been if you hadn't gotten married in the first place.
Protect your human capital
Women often discount the value of their college or graduate school degrees and their time in the work force. For better or worse, it's the female half that usually ends up raising children, downshifting into "mommy track" positions, having those infamous gaps on their resumes, or just struggling for that elusive work-life balance.
So even if you don't have any hard assets in your name, I advise all women to write a prenup that includes some kind of pay out provision to compensate them for any interruption in their career if the marriage doesn't pan out.
I went to law school with plenty of women who are now full time caregivers. And many mothers with MD's and MBA's have told me that they never would've guessed that they'd be the ones staying at home, or that they'd be forced to let their jobs take a backseat to family demands (one of them never planned on having kids to begin with). In these cases, prenups can empower women by placing a price tag on work for which there is normally no paycheck and no seniority in the "real world."
Prenups can also help insulate you from major consumption disparities between you and your spouse. Many of the parents I've worked with are often surprised by or disagree with their partner's spending habits. Better safe than sorry. For example, if your husband files for bankruptcy (or racks up serious credit card debt), and you haven't signed a valid prenup, creditors can come after either one of you to collect payment. So be practical and proactive, or that diamond he's holding out could end up costing you a bundle a decade from now.
Trust me. It's good for your marriage.