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Five Financial Questions Before Marriage

  
By: Robert Roy Reed, Ph.D., CFP®

You think sex is intimate? Let’s talk about money!

Before you start planning your wedding (a major financial event), you and your intended should have a heart-to-heart about money and your marriage. Fair warning: be ready for surprises and heart-felt bargaining. You don’t have to make now-and-forever decisions, but the issues should be on the table so both of you are aware of them.

1. How much debt do you have? This is one of the big questions because it can be an embarrassing record of past indiscretions. Does your partner have massive student loans? Does he routinely carry a large credit card balance? Does she even know how much debt she has (a warning sign)? Does he refuse to talk about his debt (a serious warning sign)? We all make mistakes and there are valid reasons for carrying debt, but you shouldn’t be blindsided by discovering the numbers after the wedding.

2. How do you feel about debt? Does debt drive you crazy or do you feel that making minimum payments is fine? What kind of debt are you (un)comfortable with? Do you pay off car loans quickly or are you happy with smaller payments over a longer time? Is it OK to borrow for a vacation or for new electronics?

3. How will we manage money? There are many alternatives, each of which can make a loud (if unspoken) emotional declaration. Will we keep our finances separate? (“I don’t trust you around my money.”) If so, how will we share expenses? (“If you make more than me, you should pay more than me.”) If we keep separate accounts, do we each keep all of our personal income and simply share expenses?

Will we pool our money into one account? (“Two checkbooks now beat as one.”) If we pool our money, who will be responsible for the bookkeeping and paying bills? (“I am more responsible than you!”) Will we have a scheduled time to talk about our finances and money goals?

4. How will we handle purchases and saving? This question gets to the heart of your shared financial life because it directly addresses your personal priorities. What in your personal life do you prioritize financially? How does your partner feel about it?

Do you need to consult over big purchases? How big is big? No one likes feeling micromanaged but many damaging conversations begin with, “You spent how much on what!?” What is worth spending money on? Cars? Vacations? Clothing?

And don’t forget ordinary expenditures. If one of you is perfectly happy getting groceries from a dented can outlet store but the other insists on Whole Foods, you need to get this in the open for discussion. Will you regularly support charities? How often and how much and which ones?

The flip side of spending is saving. How much will you regularly save and what should you save for? Do you have an emergency fund? Will you regularly put aside money for vacations? If you plan to have children, should you start a college savings plan now? And, of course, there is saving for your own retirement. Retirement might be far down the road, but it is on the road.

5. If we have kids, will we both work? This is a big dollar question and one that dramatically affects finances, life style and professional careers. Children are a serious financial drain. Many of us are very happy with our choice to have children, but make no mistake, the costs are significant. The issue is not simply direct expenditures (a baby stroller and car seat can easily cost $500!), there are also the things you can no longer spend money on (that two-week wilderness kayaking trip).

Then there is the question of your professional career. Will one of you put a career on hold to take care of children? Do you have the kind of career where that is even possible? If you are both career-oriented, does having children even make sense? If these questions are not addressed openly, unspoken assumptions can create anger and resentment.

Each of these questions is very serious and very, very personal. You don’t need to arrive at final answers before the wedding, but you and your intended need to start the conversation.
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