Once the big question is popped, it’s easy to get swept into an endless sea of important details. From choosing the right color for the bridesmaids dresses to determining how many people the ballroom will hold, stopping to have a heart-to-heart about finances often gets put on hold for more pressing issues –like how you’re going to convince Aunt Beatrice that even though her precious Pomeranian would make a lovely addition to the wedding party, a four legged fur ball isn’t exactly what you had in mind when you said you needed a ring bearer. However, before you tie the knot and sail off into the sunset as husband and wife, our experts recommend that you each address the following four issues before you say “I do.”
How Much (and What Kind of) Debt Do You Have?
You may not be shocked to learn of $50,000 or more in student loan debt, but how would you feel about thousands of dollars in outstanding payday loans? Many couples try to hide the more embarrassing debts in hopes of having them taken care of before the final vows are spoken. Unfortunately, this is ambitious, and not fair to the other person in the relationship – who will likely be saddled with this extra responsibility once finances are merged. It’s best to get the worst of your confessions out of the way before you wed; important debt confessions will help you set a more realistic wedding and housing budget, and will prevent stressful admissions that could jeopardize marital bliss down the road.
How Will You Handle an Inheritance?
Danielle L. Schultz, a fee-only planner with Haven Financial Solutions, Inc., tells us that many young people are inheriting money from their baby-boomer parents and grandparents, and that these funds should be kept separately in the name of the individual and not merged into joint accounts. “If the couple ever divorces, it’s a mess; if they don’t, they can always withdraw money and use it to mutual benefit.” She also advises that the couple consult with a financial planner and real estate attorney to help them determine how to title any funds that have been left to just one partner.
Who Will Stay Home with the Kids? Who Will Work?
Waiting until the kids are born is too late to have this discussion. While being home with your children, especially in their more tender years, has a value all its own, couples need to consider the impact on future earnings, social security, and loss of job marketability. Danielle has seen too many women out of the work force for 20 years or longer before getting a divorce. “They are stunned to discover that they will only receive half of their former husband’s Social Security amounts. Had they stayed together, their retirement income as a couple would have been 3 times what the SAH parent will receive–a shocking difference.” The important lesson to learn here is that both partners need to agree on a game plan before they walk down the isle.
What Are Your Attitudes Toward Money? How Were They Shaped?
Childhood is a major factor in our approach towards most things, including cash. It’s no surprise, then, to learn that it can deeply affect our spending, investing, and saving actions as adults. Bill Hammer, a CFP with Vanderbilt Partners emphasizes that it’s important to share those stories surrounding what money was like growing up. Were times hard? Do you feel like you had more than enough? Take time to discuss what you liked about money as a kid, and what you would like to change after marriage. Only then can you start to work toward healthy expectations.
So now that you know what to ask, just how do you go about it? According to Rob Drury, Director of the Association of Christian Financial Advisors, it’s best to be diplomatic. “It’s not a good idea to conduct an adversarial interrogation on one’s soon-to-be spouse, but one should respectfully insist on complete transparency. All of the financial issues of both spouses will definitely come to roost eventually, and being blind-sided in any area of the marital relationship is always a bad thing.” Rob recommends getting counsel from a financial advisor or counselor before tying the knot; many will do a first consult for free in order to establish a potential new business relationship.
More on Love & Money:
- The Marriage Decision Matrix: Is Staying Single Better for Your Finances?
- Budgeting for Baby: Money Tips for Expecting Parents
- Love and Money: Three Credit Related Myths to Consider
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