Communication is key to a long and happy relationship, and it starts with discussing a few financial matters before you get married. About 45 percent of marriages end in divorce, and you don’t want to be part of this statistic.
Debts and Obligations
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Marriage is more than living with someone and perhaps having children. It’s a legal contract that will hold you together through wealth and poverty. It will carry you through falling in love with each other again and again. It will also support you through inevitable periods of mutual dislike.
Marriage rewards hard-working communicators who overcome rainbows and happily-ever-after fantasies to face up to the mundane aspects of logistics and money. These practical conversations should let your partner know about any legal matters that involve you, as they will legally be your partner, and often jointly liable for your decisions. Discussing your debts and student loans is a good start. It’s also free to check your credit score, and you can go over the results with your partner. You can talk about consolidating your debt or even refinancing student loans to get a better interest rate.
Other items to put on the table include savings, trusts, investments, obligations to relatives, alimony, child support, lease payments, and ways to manage each individual’s student loans, such as through refinancing. It’s time to lay your cards on the table. Take a deep breath and open your heart to your other half.
Your Financial Philosophy
Now it’s time for some soul-searching. How do you feel about money? Do you prioritize financial power or independence? Do you like gamesmanship? Or is it all simply unimportant to you? Hopefully, you don’t think it’s unimportant. Money is a powerful resource, and you underestimate its power at your peril.
How does each of your families use money? Are you savers or spenders? Is money a reward or a burden? Does your family admire the rich or assess people without caring what they have in their wallets? These attitudes will have a powerful effect on your marriage, especially if they diverge or if you have kids. Problems appear whenever different attitudes conflict.
Look at your financial plans and add things such as having children or caring for an elderly parent or grandparent. Clarity and specificity are crucial.
If you should choose to have a prenuptial agreement, get it in writing. Cover the best and worst scenarios. If you divorce tomorrow, who gets the dog? If you pass on in 60 years, will you split your assets equally between your kids, step-kids, and adoptive kids? Most lawyers have a basic prenuptial template that you can customize.
You can start budgeting using the wedding and the honeymoon as practice. Eventually, however, you’ll have to bring your incomes together and decide how paying for things will work in your relationship. Discuss your budget and think about things like whether you want to open joint accounts once you get married.
Financial discussions may be low on your list of things to do as you prepare for a wedding, but it’s vital that you plan ahead. Pave the way for a healthy marriage by discussing your legal agreement, your prenup, and your budget well before the big day.