Congratulations ... you're getting married! After dating who-knows-how-many people who didn't make the cut, you've finally found the one with whom you want to say, "I do." Now, you're all set for a lifetime of wedded bliss.
But hold on: Remember, this is a lifetime commitment. And as much as you think the road will be easy since you're so in love, reality says that even long-term couples must overcome challenges to be successful. And many of these stumbling blocks will be related to money.
To pave the way for a blissful financial life, it's important to have "the money talk" before walking down the aisle. Sit down with your beloved and discuss the following topics in order to have peace of mind when married life begins.
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1. Compare debt/savings profiles
A few years ago, a study by financial advisor Ramsey Solutions discovered that close to two-thirds of marriages start with debt. This makes sense because couples may be paying off student or auto loans, and they likely have credit card debt from furnishing an apartment or paying for the wedding.
This discussion is one of the toughest talks to have given the financial and emotional baggage debt can sometimes represent. Does one of you tend to spend more than you earn? Is the other a cheapskate who saves every little penny? These differences may not seem significant now, but they will become larger and larger as your lives come together.
As a result, they can drive a wedge through a marriage and lead to mistrust. It's important to sit down, list all of your debts, and develop a plan for how you'll handle money. And if one of you tends to be in heavy debt, you may want to try credit counseling. After all, getting married is a new beginning, and that debt is likely something you'll want to leave in the past.
2. How will you combine finances?
Prior to that kiss at the altar, you have been responsible for putting away savings, paying bills, and balancing the checkbook -- for yourself. Now, all of those things have to be done for two.
Do you want to put all of your household income into one account and go from there? Or do you want to keep separate checking/savings accounts and create one joint account for household needs? It's a good idea to figure out these details well in advance of your wedding because it's the last thing you'll be thinking about when filling those goodie bags for your guests.
3. Who will handle the family's investments/retirement savings
While your present focus may be all engagement parties and wedding gifts, your future needs attention too -- at least in principle. Who will be responsible for handling the couple's investments? Is one of you comfortable with personal finance? If not, then which one of you wants to become more comfortable?
Since saving money is the basis for everything the two of you will want in your future -- including buying a home, vacationing, having children, a comfortable retirement, and the like -- it pays to decide who's going to take the lead in making those decisions so there's no confusion down the road.
Together, you can sketch out a financial plan that would cover all of these goals and how you intend to meet them. Life is always changing, and your plan will change, too. But it's easier to make changes to an established plan than to start from scratch at the moment issues arise.
4. Who's paying the bills?
It's a nasty job, but someone's gotta do it. Who's going to be responsible for making sure the bills are paid? You wouldn't want the electricity or (Heaven forbid!) cellular service to be turned off because you thought your significant other was paying for it. One of you has to step up and say, "I'll do it" -- and then make sure it gets done.
5. Oh yeah ... get that prenuptial agreement
It's the most unromantic of all these conversations but the most important. Look, no one enters a marriage thinking it's not going to last. But according to the American Psychological Association, approximately 40% to 50% of first marriages end in divorce. Of course it won't be yours ... but just in case it is, it's best to protect yourself.
When you're deeply, madly in love and set to walk the aisle, the last thing on your mind may be household finances. Regardless, it's best to sit down and have a series of conversations to cover the above issues well before your special day. After all, someone has to pay for the wedding and honeymoon -- and everything else that happens once married life begins.
