Monday, October 25, 2010

8 Financial Discussions to Have With Your Spouse (or Fiance)

Welcome visitors from the Carnival of Personal Finance #281: Halloween Candy Edition hosted by Consumerism Commentary. I hope you enjoy your stay here. You happened upon my blog at the beginning of a series of giveaways that will be going on. You can see the current ones listed in the right sidebar. Find something around here you like and stick around for a while. We'd love to have you!

Getting married is a huge commitment. You promise to put up with another person on their ugliest of days, take care of them no matter what, stay true to them exclusively, grow old and ornery with them, and figure out how to put up with their most annoying of habits that seem "cute" before about 2 years into the wedded bliss stage.

Sorry to glamorize it for you. =)

Seriously...don't get me wrong. I love my husband dearly and I am so glad that I can still call him my closest and dearest friend. But together we haven't always been smart with money. Some of it was out of stubbornness, some out of stupidity, and some out of naivety. So I'm going to tell you that there are (at least) 8 financial discussions that you and your betrothed should discuss before the big day. If you've already passed that day and haven't had these discussions yet, it's never too late to get started!
  1. Debt: "Hey there, Baby. How high is that balance on your credit card?" isn't the sexiest pick up line. But it is something you definitely ought to know before taking on the legal liability of that card as the spouse. Yep...even if your name is not on it, the whole "what's yours is mine" rule applies unless there is some sort of legal pre-nup you guys have created. Crazily enough, there are some people who go into marriages having NO IDEA what they are getting themselves into debt-wise. It's not too rude or personal to ask the person you are about to wake up next to with morning breath. It's essential.
  2. Financial History: Does your fiance have something in their financial past that might make joint accounts a problem? Believe it or not, some people go into their relationships without disclosing they have a foreclosure or bankruptcy in the past. They feel that now they are "past" it, they do not want to feel its pain again. However, a lot of bitterness will result if one spouse discovers they were clueless about a prior financial offense that might delay or incapacitate your ability to buy a car or house or furniture together.
  3. Financial Goals: What is the plan? Do you both want to work forever? What do you want to do in retirement? Do you want to stay at home as a wife and/or mother? Do you even HAVE a goal? Sure, goals can change, but it is good to at least have these discussions to start the planning process. And these goals aren't written in stone, so they can develop and reshape as life requires. Just talk about it though!
  4. Joint Accounts? Will you have a joint checking account? Will you have separate checking accounts? Will you have one joint one for the bills and separate ones for spending? You have to decide what works best for your situation and personalities and go with it.
  5. Who will Handle the Account? If you go with a joint one, who is going to handle the bill paying, balancing, and overall being responsible that bills get paid on time and you don't overdraw the account?
  6. Do You Have a Spending Limit? Once again, if you go with a joint account with no side spending accounts, how much can one person spend (single transaction, per month, per week) without having to check in with the other. This requires some evaluation of your spending habits. If you set a $100 limit, it doesn't make sense for one person to spend $99 each and every day without checking in, so you might need a weekly limit. Find out what works best for you.
  7. When/How Will We Discuss Money? Money is a very emotional topic. Strange, but true. You don't want to do it when you are rushed or prone to being stressed. You shouldn't do it in bed (leave the bedroom for other things). You shouldn't do it while one spouse is preoccupied (during Monday Night Football, for example). Pick a time or place to do it and reserve your conversations for that time unless necessity requires otherwise.
  8. Lastly, And Probably Most Importantly: The Budget: You will have new bills together as well as possibly more money via combined incomes. A new budget is required. If you've never lived on a written budget, this is definitely time to start. You or your spouse-to-be may feel that you've always had control of your spending without having to write it down. And that may be true. But now that someone else will have full access to your account(s) with you, it will prove trickier than you know to keep up with everything. Make sure those debts, goals, and incomes are reflected accurately in a written budget. It's okay if the first one isn't perfect. You can alter it to fit your needs as you figure out what your (as a couple) spending habits and needs will be. You will also change it as life makes you change it (raises, children, medical bills, etc). But get it in writing so you have a starting point.

Although these are the non-romantic details of a marriage, you cannot ignore those less-beautiful sides of this union. I promise you there is nothing less romantic than a couple who are constantly fighting over finances and making accusations because they never discuss how to do this together. No amount of love will conquer that.

Talk it out. Take control of your money rather than letting it control you and your relationship.

Photo credit: penywise

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