Romance is in the air, especially with Valentine’s Day just around the corner. But if you’re thinking about getting married – or hoping he’ll pop the question with a nice big diamond ring – you should first come back down to earth and think: “no romance without finance!”
In all seriousness, it’s a smart idea to start out a marriage on the right financial footing. So before you walk down the aisle with your significant other, or before you get engaged (on Valentine’s Day, or any other day) here are four important questions to ask and answer with your mate.
As a practical matter, these are questions all couples should pose – even those who’ve already said: “I do.”
When you grew up, how were finances handled in your home?
Explanation: This will tell couples a lot about their significant others. In some homes, one person handled all the financial affairs. In other instances, there were shared responsibilities.
Either way, your spouse may have expectations based on their own upbringing.
Case in point: There’s no sense in a woman getting hitched and then finding out later that her husband is “very old school” and expects to manage all the money and “give you an allowance.”
That’s a totally true story. In fact, I’ve had several women tell me this happened in their relationships. I always tell them something like: “You’re 35 years old, not 13. An ‘allowance’ is for children; you’re an equal partner in the relationship, regardless of your income or status as a working person or stay-at-home mom. So, no, you’re not getting an ‘allowance.’ Rather, your spouse is allocating family resources.”
Exactly how those family resources get divided and who decides is a whole different matter.
But I digress. Let’s move on to the next question!
What is your credit score?
Explanation: No, it’s not a romantic topic … unless you consider good credit sexy like I do! 🙂 But knowing about your mate’s credit standing is crucial to getting off to a good financial start together.
If neither of you knows your score, take time to get them together. You can obtain your free credit reports – from Equifax, TransUnion and Experian – free of charge online at annualcreditreport.com.
You have to pay for your FICO score. It’s available at myfico.com. But some credit card issuers and banks will give you a FICO score or other credit scores free as well.
Don’t skip this step, however, because it will allow you both to honestly see each other’s debts.
Whatever you find, whether the person has been responsible or reckless, don’t judge. Instead, talk through the issues, find out what problems or setbacks may have occurred, and find out if they learned anything from their credit/debt setbacks.
How much total debt do you owe?
Explanation: a review of the credit reports will mostly answer this question. But some people have personal debts too (like child support or family loans).
Perhaps there are student loans in deferment and they might not yet show up on a recent college grad’s credit reports. Others have business debts, and lines of credit that may not appear on a credit report.
It’s important to work from a position of truth and to have a complete picture about your loved one’s debts – especially if you’re contemplating marriage.
Do you prefer joint or separate accounts?
Explanation: Knowing your future spouse’s credit rating and financial status is especially important if you intend to get joint credit cards or loans, or even co-sign for a home or car.
With joint accounts, each of you is responsible for 100% of the debt incurred together. You should also talk through whether to have joint or separate banking accounts, like checking and savings accounts.
In my professional experience, I think it’s generally better for most couples to have both – separate accounts for their own spending, and then a joint account to manage and pay household bills.
Advice for Couples When One is a Spender and the Other is a Saver
Some of you may worry about asking these questions out of fear of what you’ll learn, fear of what you have to disclose, or just anxiety about the potential for arguments.
Well, don’t stress about the conversation turning into a money battle, not if you can understand – and get your mate to see – that even financial opposites can do just fine together. That’s right, a spender and a saver can indeed live together in financial harmony.
Relationships where two people are financial opposites aren’t automatically doomed. You can work it out as long as both are willing to compromise, communicate and get on the same page.
How can couples get on the same page, especially if they constantly fight about money?
Disclose, Discuss, Decide
I have a three-step solution for couples that works really well. I call it: Disclose. Discuss. Decide.
It’s all about being financially honest with your mate – that’s the disclose part.
Then comes the truly hard part – discussing issues that most people don’t talk about or would rather sweep under the carpet.
The final thing is to decide how to move forward together. Marriage is about partnership and building a life as one unit. So you both have to be committed to moving in the same direction.
If you can think in those terms, and avoid the blame game or having to be “right” all the time, it makes communication far better and it improves the personal and financial health of the relationship.
Isn’t that what you want in the long run: a healthy, happy relationship that lasts a lifetime?