So, you’re getting married. First, congratulations. Second, it’s time to get serious.
That may seem redundant (you were serious enough to get engaged, right?), but it isn’t. Now is the time, before you’re married, to talk seriously about money, property, credit and debt.
When you marry, your spouse’s income – as well as his or her debt – becomes yours, too. To a certain degree, your property and finances merge with those of your spouse. With all the other life issues that barrel down the marriage pipeline, it’s important to determine where each of you stands when it comes to saving and spending. While discussing these issues may not be as exciting as planning the big day, they are every bit (if not more) as important. Not taking the time to do so now can often mean you wind up paying for it later – literally.
To ensure you are on good financial footing before taking the big step, we offer this pre-wedding discussion checklist as a guide:
- Money: It’s not ranked as the number one reason for divorce for nothing. Setting expectations around how to spend and save it is key. What do each of you consider essential versus discretionary? Are expenses shared or managed separately? Will you be joining existing accounts, such as savings, checking, IRAs, money markets, etc.?
- Bills: How much of your joint incomes will be directed toward paying current and future bills? If there is a disparity between salaries, who contributes to what and how much? Who will be responsible for paying all the bills?
- Debt: If each spouse enters the marriage owing money, perhaps for student and/or auto loans, or revolving credit card debt, will these be paid down separately or together?
- Cards: And, speaking of credit debt, will you continue to maintain separate accounts, or will you add your spouse as an authorized user on existing cards? How many cards are enough and which one(s) should you use? Do you agree on paying in full each month, or minimum payments?
- Goals: What does the future hold? Will you buy a home? Have children? Save for college? Travel? Transportation needs (car, minivan, truck, and/or SUV)?
- Budget: You must plan in order to reach your goals. Planning a budget can help set expectations before you’re married. Budget basics should include how much income you anticipate each month (after taxes), what assets you have (including bank accounts, any owned property, and investments), current debt (any loans, mortgages, credit card balances), and expenses (rent, mortgage, food, utilities, clothing, transportation, retirement accounts, travel, entertainment, and so on).
- Emergency Fund: Even sunny marriages can experience rainy days, so it’s important to plan for these as well by squirreling away some extra cash. Most experts recommend enough cash to cover all expenses for at least three months.
If it seems unromantic to discuss money, having an open and honest discussion about it now can produce real savings down the road. It’s good to remember, too, that compromise is a big part of a successful marriage. Be sure to have your negotiating hat on during the discussion. And, finally, be
prepared to revisit your financial plan throughout your marriage. Life, like marriage, has a habit of changing even the best laid plans, so adapting and adjusting should become second nature.