Erika from Newlyweds on a Budget blogs about love and money, and managing finances as a semi-newlywed.
My husband and I dated for just three months before we got married. Our conversation about finances before we got married can pretty much be summed up like this:
Me: So I make this much and you make that much, that should be good, right?
Him: Yeah, I guess so.
Ah, to be young and in love. Don’t make the same mistakes we did. Here are five financial conservations you should have before you get married.
What is your net worth?
Be open about your incomes, inheritances, total line of credit, etc. Share your FICO score. Try to know as much as possible about each other’s financial situation so no surprises arise after “I do.” What if someone comes into the relationship with substantially more savings than the other? Is this money expected to be shared or kept separate?
Checking accounts: separate, combined, or a mixture of both?
Decide how you will manage money before you get married. Will everything be shared and open? Will you have your own accounts and contribute to a joint account? If someone makes 70% of the income, will they contribute 70% of the bills, or should it be split 50/50? Maybe someone is more financially savvy while the other gets hives at the sight of a bill statement, a system should be put in place that keeps both parties aware of their financial situation.
What is your total debt?
You should have a concrete number, not an estimate of each other’s total debt. My husband’s “oh I think it’s about $1,000 on my credit card” turned into to be about $3,000 in credit card debt. It wasn’t a blatant lie–he had never sat down to calculate his total debt before, so he only had his own estimate. I failed to consider my car loan or student loan debt.
What are your financial goals?
What are your dreams of retirement? Maybe one of you wants to travel the world while the other hopes to settle in Florida? When and where do you plan on buying a house? How will you pay for family vacations? How do you manage investments?
What are your new expected living costs as a married couple?
Most couples nowadays live together before marriage; my husband and I didn’t. But even if you are living together before marriage, chances are your finances are still kept separate. How will your finances change now that you’re married? Car insurance? Family gifts? Entertainment and dining?
What other financial conversations should engaged couples have?
This was a guest post by Newlyweds on a Budget.