11 Essential Money Matters to Discuss Before Marriage

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It’s always fun to discuss the excitement of your wedding plans, but what about the not-so-fun topics? Among these are your personal finances and how you plan to handle money matters as a couple.

Unfortunately, a survey of engaged couples by the National Foundation for Credit Counseling found that “68 percent of respondents held negative attitudes toward discussing money with their fiance, with 5 percent indicating the discussion would cause them to call off the wedding.”

That’s not good. Before you take a vow to share the rest of your life with a significant other, you should have the money talk to determine whether you’re on the same page — and if not, how to get there.

1. Share your philosophy about money

How do each of you feel about money? What are your thoughts on how financial affairs should be managed? You should also both disclose what you learned about money as a child so you can gain a better understanding of your respective views.

Perhaps you were raised by parents who were well-off and you routinely live every day as if you had the income to support the lifestyle of your youth. If you fit the bill, marrying a saver could result in conflict. How will you work this out?

If you’re having trouble breaking the ice, you could try a money quiz like this one on Motley Fool. You each privately answer the questions — then compare your answers at the end to tease out how you are alike and different. Here’s a taste of it:

1. You get $1,000 back as a tax refund. What would you spend it on? ____________ What would your partner spend it on? _______________

2. You view money as (circle one):

(a) A necessary evil.
(b) The path to happiness.
(c) Nice to have, but I won’t sweat over it.
(d) Hey, where’s my wallet?

The main thing is, get started on the conversation.

2. Chat about credit reports and scores

After you’re married, you will continue to have your own credit file, but you may also share joint accounts – like credit cards, car loans and a mortgage. If your partner has bad credit, that fact will negatively affect the interest rate you get on joint accounts.

Discuss why your credit scores are high or low, and how you can go about improving a bad credit score.

3. Disclose financial obligations

Is your money being spent in places that your partner is unaware of? Now’s the time to come clean and discuss all arrangements, such as charitable contributions to relatives, child support or alimony payments.

Other outstanding obligations, such as auto loans, student loans and credit card debt, should also be disclosed.

4. Make a plan to cut overlapping expenses and pay down debt

The National Foundation for Credit Counseling recommends that couples look for areas where they can cut overlapping expenses:

For example, most cellular phone companies offer family plans that can cut monthly phone costs, or see if joining the same gym can help to reduce monthly dues.

At the same time, make a plan to pay down both of your debts so you can establish the best credit possible for the day when you want to apply for a mortgage or car loan. Double down on your credit card payments to eliminate this expensive type of debt.

5. Set goals

Do you have a list of short-term, midrange or even long-term financial goals? Have you discussed them in detail with your mate? If not, put everything on the table and determine if you share common goals. At some point, you will need to establish such joint goals.

6. Budget

If you’re going to spend the rest of your life together, why not learn how to manage your money as a unit? Does one of you wing it while the other sits down each month and creates a detailed spending plan?

There’s no way around it: A budget is an absolute must, or you may find yourself coming up short month after month – or, even worse, find yourself with a mountain of debt.

Need a little help? Planning an affordable wedding is a great way to get started. After all, do you really want to spend the next five or 10 years paying off all those costs attached to the big day?

7. Talk about children

Are kids in your future? The cost of raising a child born in 2013 up to age 18 for a middle-income family in the United States is approximately $245,340 (or $304,480, adjusted for projected inflation), according to an annual report from the U.S. Department of Agriculture. Note that this estimate does not include expenses after age 18, such as college. If you want to include public or private college education, get a more detailed breakdown of costs, and see variations according to where you live, check out the Cost of Raising a Child Calculator on babycenter.com.

Of course money is not the only consideration — surely not the most important one — in the decision to raise children. But it is certainly helpful to understand what resources you will need to raise a family and to plan, if you go that route.

8. Plan for retirement

Assuming you’re together for the long haul, retirement savings will eventually be an important source of income in your household. Do both of you participate in retirement plans at work? If not, make sure that the working spouse is contributing to an IRA for the non-working spouse.

And while you’re at it, it’s a good idea to look into life insurance policies, both private and employer-sponsored.

9. Will you have joint or separate accounts?

This potentially sticky topic should also be hashed out before you tie the knot. While a marriage is indeed a union of two parties, some couples decide not to combine their finances and instead maintain separate bank accounts. Check out some of the pros and cons here: “10 Things You Should Know About Joining Finances in Marriage.”

There are also cases where it’s advisable to have a prenuptial agreement – for instance, when one partner is substantially wealthier than the other and has other heirs to consider. It will also save you a ton of time and money in the event that you divorce and go your separate ways.

10. Share career plans

How do your career aspirations fit into the overall plans for the marriage? Perhaps one of you will take on a demanding job that will require the other to become a stay-at-home parent and rely solely on one income.

Or maybe you want to start a business, but need to tap into savings to make ends meet during the startup phase.

Either way, money is involved, and the topic needs to be discussed.

11. What’s your backup plan?

When money gets tight in a marriage, fear or frustration can cause discord. That’s why it’s so important to establish and grow an emergency fund. What’s an ideal cushion? What are the rules for withdrawing funds from the account?

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