Congratulations, you finally got your man or woman to put a ring on it! You’re over the moon, and you have thirty bridal magazines and endless checklists waiting for you to start planning your dream wedding. I’ve been through the process, and I know for certain those checklists don’t list some of the most important things to do before you walk down the aisle. Please, please, please read through this post if you are about to get married. Share it with anyone you know currently in the happy engagement bubble or even if they are just moving in with their significant other. One of the biggest reason people divorce is because they aren’t on the same page when it comes to finances and budgeting. But who wants to think about divorce when they aren’t even married yet?
Given my career, I always take care of the finances in my relationship. However, I found it to be a very dangerous thing to keep the finances one sided. Now I try to be completely open with my husband about our finances, our goals, and our budget. Whether you are about to get married or have been married 20 plus years, it is important that everyone in the relationship knows what is going on with their money. You don’t want any surprises like a $30,000 hidden credit card bill from his ridiculous and over the top watch collection.
You can start the conversation by talking about a dollar amount cap with your future spouse. If you are about to spend more than that amount, you should discuss it with your significant other first. One couple told me their number was $50, and I was shocked. I asked them if they have to talk to each other every time they fill up their gas tank. Just running errands, you would have to call him ten times! $50 is a little too low for me, but you get the idea. Every couple should have their number in the back of their head, and it keeps you on the same page with expenses. Creating a budget together is another great place to get the ball rolling. It is not a fun thing to do, I hate finding out where all my hard earned money goes, usually to my dog. However, it is essential when deciding how much to spend on cars, housing, and your wedding cake. You will need to decide if you want to keep separate bank accounts and credit cards, and also, who will pay which bills each month. I recommend each person take a few of the monthly bills, so you have a grasp how it works and are comfortable paying the bills.
You might want to review your financial goals and your progress towards those goals. Make sure you aren’t at a crossroads with how much you want to spend and/or save. It can be extremely hard if one of you loves credit cards and the other wants to put all of your cash under the mattress. You don't want your spouse's excessive credit card use to damage your credit score either. Make sure you aren’t added to your future spouse’s current debt. Just in case something happens, you don't want to be stuck with the repercussions of the debt while not even enjoying the new Jet Ski. Always keep at least one credit card in only your name so you maintain a personal credit history. Check each of your credit scores annually especially before big purchases such as a house or car. You should be on the lookout when reviewing your credit history for any expense or credit card that isn’t yours.
If you are getting married later in life and have significant assets, you may want to consider a Prenuptial Agreement. A pre-nup tends to have an unromantic perception, but it can be very useful if you or your spouse has substantial assets, a family inheritance, or a business. It can also protect you from his or her debt prior to the marriage. Now-a-days, the majority of marriages occur after a couple has established a career or careers. You will probably have a nice size bank account or a house that you may want to protect. Or possible you received some money from your grandmother’s estate, which can be kept in the family with the use of a Pre-Nup. So all judgments aside, I think a Pre-Nuptial Agreement can be a great instrument. Just tell your man to get over it and sign it. Better yet, have the attorney who drafted it or your advisor sit with you while you explain the purpose of the agreement. You can put them blame on them and take it off of you.
Because a lot of couples are getting married later in life, it is common for them to purchase a house before they tie the knot. If you own a house together prior to getting married, most likely the title to the house is joint tenants in common. This means if one of you passes away, your share of the house passes to your estate, not to your fiance. The court will decide who your next of kin is, most likely your parents or siblings, and this is who will inherit your portion of the house. To prevent this, you can get your wills done so that your share of the house goes to your fiance or to whoever you want. Once you’re married, the house will go to your now spouse, so you can draft your wills or toss your luck to your fiance making it to the wedding date.
There is more to this checklist, and I strongly recommend you at least sit down a few times with your fiance to go over your thoughts and feelings about money. You can talk with your parents about it or with a financial advisor to get some insights and tips about what to do and what not to do. Every couple operates differently, and you need to find what works well for both of you.
Now that you are prepared financially for marriage, we will cover what to tackle after the I do's next week. Any insights and tips please share them on my Facebook page Jessica Weaver, Wealth Advisor.
Jessica Weaver, CFP®, CDFA™, CFS®
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