7 Money Things You MUST Discuss Before Getting Hitched
In a recent study, 57% of divorced couples cited finances as the leading contributor to their divorce, and 65% of married couples admitted to arguing about money regularly. It’s not surprising that finances be the source of such significant friction in a relationship – you and your future spouse may have different ideas about how much debt is too much debt, or who should pay the bills, or how much money should be spent on vacation – and those are just three examples of thousands of financial discussions you and your spouse will need to have together if your marriage is going to last.
But talking about money can be really hard to do. That’s why it’s so important to discuss finances with your beloved before you walk down the aisle – because making sure you’re on the same page financially can help you ensure that you’re going to start your life together off on the right foot. To help you out, here are 7 money related topics that you and your soon-to-be spouse should discuss before the big day.
1. Family History
Most of us learn our money habits (for better or worse) from our parents. If your family history involves bankruptcy, for instance, then that has likely shaped your views on money – perhaps you are extremely debt adverse because you don’t want to end up like your parents (or perhaps you have adopted a similar laissez faire attitude about debt). Whatever your specific situation, sharing how money was handled in your household growing up is a great way to start talking about how you can make a fresh financial start together as a couple.
2. Assets & Debts
You and your fiancé should have a good grasp of where you each stand financially before you get married. How much debt do you each have? What are your individual assets? This conversation shouldn’t be about shaming your significant other about how much debt they are going to bring into the marriage – but when everything is laid out on the table, if your fiance’s debt is more than you think you can handle, that is a big red flag for future problems down the road.
Believe it or not, there are some couples who really aren’t sure exactly what their spouse earns until after they get married. Have a talk about how much you earn both before and after taxes. Now is also a great time to discuss how much you are contributing to a 401K and your future financial goals.
While we’re on the topic of salaries, discussing a budget is SUPER important – ideally before you even move in together. It is vital to figure out a joint budget that takes into account how much joint money you will have each month, and how much of that money needs to go towards: bills, groceries, savings, etc. – verses how much you’ll have left over for extras like dining out. Establishing a solid budget now will save you from financial distress down the road so you over spend and end up short on your rent!
5. Credit Scores
If your future financial goals include buying a home – or financing of any kind – you should check your credit scores. If one of you has a poor credit score, it’s important to know so that you aren’t caught by surprise when you go to apply for a loan. It’s also a great time to talk through ways you might work together to improve one (or both) of your credit scores so that you maximize your ability to be approved for loans – especially a mortgage. (For tips on improving your credit score click here)
6. Who is going to do what?
It’s extremely important to talk about what each of you will be responsible for financially in the relationship. Some of the discussion may depend on how you decide to keep your finances – will you put everything in a joint account or will you each keep your separate accounts – but regardless of how you decide to handle your bank accounts, you will need to determine who is going to pay the bills. Are you going to split the bills and each pay for the bills you are responsible for paying? Is one person going to be in charge of paying all of the bills? Who is going to be responsible for making sure you are sticking to your budget or putting enough in your savings? Decide what makes the most sense based on your specific situation and get a plan together – it will save you big headaches down the road!
7. Your credit union or mine?
Most couples realize at some point, that it is easier to establish one joint bank account that merges the bulk of your finances (even if you decide to both keep separate accounts for yourselves). Whose credit union (or bank) will you use as your joint account? Now is a great time to discuss other implications from a joint account – how do you approach personal spending verses saving? Will you give yourselves an allowance for extra items like pedicures and new technological gadgets? If so how much?
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