Money can sure make people act funny. Have you ever seen those credit report commercials where the couples are living in someone’s basement because they got married before one realized the other had a horrific credit score? They’re meant to be funny, but they’re also designed to start a conversation. You really do need to talk about finances before you get married.
A lot of couples today choose to live together before marriage. The problem is they view their finances more like they would if they were roommates. If you’re simply testing the waters, you may want to keep your finances separate until you’re sure you’re going to take another step further; but then you should talk about a joint savings account, your joint bills, and your individual obligations.
Understanding Joint Debt
If you do plan to get married, it’s important to understand which debts will become joint debts and which ones will not. You’re going to have to check on your own state’s regulations as some consider individual debt incurred during a marriage to be joint while some states protect the spouse from the other’s debt.
Debts that happen before marriage may also impact the couple together. This often applies to credit card type debts, but student loan debts often remain the responsibility of the student who incurred them.
Your Spending Habits
What happens when one person is a spender and the other is a saver? You may not have too much trouble if your habits are mild, but if one person is an emotional spender and uses that to create debt, the saver in the relationship may begin to resent those frivolous habits. You’ll need to discuss which parts of your finances you’ll keep separate, which you’ll make joint, and how you’ll handle individual debt and savings plans – especially as you work towards future goals, like houses, cars, and being able to afford children.
How will you Handle Existing Debt?
The fact that one person has debt doesn’t mean the relationship has to be put on hold. You do need to have a clear discussion about how that debt will be handled, though. Will you work together as a married couple to clear all of the debt in the relationship or will the person who created it be 100% responsible? What arrangement will be best, again, to move you towards reaching your financial and lifestyle goals.
Money problems can cause significant strain on any relationship. Talk openly and candidly and don’t hide anything and don’t hesitate to do some research to find out more about what you should be discussing and reviewing. The more willing you are to work together, the stronger your relationship will be.