Top 10 Financial Considerations Before Getting Married
Congratulations on your upcoming wedding! You've reserved the church, you've ordered the flowers, and you've hired a caterer. But more importantly, have you and your future spouse had "the talk," probably the most overlooked discussion before marriage, the one about money?
"Arguments about money is by far the top predictor of divorce," says Sonya Britt, assistant professor of family studies and human services and program director of personal financial planning at Kansas State University. Before you take a walk to the altar, be sure to go over this financial checklist:
1. Taking on Joint Debt
After you get married, individual debts may become joint debts. Be sure to understand your partner’s financial history and know what debts he or she already has. Once you are married, those debts may become your responsibility. Learn about your partner’s financial obligations and understand what types of financial decisions he or she tends to make now, before you are married.
2. Credit Scores
Credit scores are important, and once you are married, both your score and your spouse’s score will be important in determining whether you quality for any large loan, such as a mortgage. If you are planning on making any large purchases, have any negative items and incorrect information taken off both credit scores, if possible, before getting married. This process should be a priority for both of you, so that you start married life with a clean credit slate.
3. Trust and Personal Information
Trust is an important part of any marriage, and you have to trust your partner with your financial records as well as your credit score and financial obligations. If you are not married to someone you can trust to share financial decisions, or who has a vastly different spending style and refuses to compromise, you may end up with damaging items on your credit report -- and in a very bad marriage.
4. Budgeting
Some couples choose to live together before marriage to make sure they are financially compatible. Merging two financial lives is not always easy, even if you have already begun living together. You must learn how to budget. Sit down to discuss each other’s financial obligations and what you can do to make sure all obligations are met on both sides.
5. Purchasing a Home or Renting a Property
Discovering where you can live and how you will pay for it is another area in which credit and financial obligations are important. Whether you are looking to buy or rent, you will need to have credit scores high enough to be able to obtain the property you want.
6. Are There Children Involved?
If one or both of you has dependent children from a previous relationship, creating a financial obligation, the two of you will have to discuss the related issues. The financial responsibility for the children (and/or child support payments) will affect both of you after you are married.
7. Open Discussion of Financial History
There may be some facts about your financial history you would rather your significant other not know, but it is important not to leave anything out. Your partner will probably discover these problems sooner or later. Keeping important or significant issues a secret can only cause future problems between the two of you. One person is usually better off financially to some degree than the other, so discuss how to split finances evenly and fairly.
8. Discuss Long-Term Financial Goals
You both need to know where you see yourself in 5, 10, and 20 years from the date you marry. Discussing this vision includes discussing both long and short-term financial goals with one another. One partner may want to go back to school, or remain home to care for children. Discussing these plans can help you merge and find the middle ground so that your joint financial plan works for both of you.
9. Create a Game Plan
You should create a plan to work together to meet your financial obligations. You need to be honest with one another about your financial situation -- positives and negatives -- and decide on a method of debt repayment, as well as a budget plan. Decide how often you would like to revisit the subject. Create goals and a realistic plan you both can follow through with and stick to.
10. Know Who Will Manage the Money
Sometimes, both people will manage the money, but most often, just one person will manage it on behalf of the couple. Recognize each other’s strengths and weaknesses, and allow each individual to do what he or she is best at doing.
