Congratulations on putting a ring on that finger! Before you start calling the caterers and booking a venue, it’s time to sit down with your fiancé and have a serious conversation. There’s no better time to talk about money than before you start to plan the wedding. This way, not only do you both get to go into wedding planning with aligned expectations, but you can also do the same for the days and years that come after the big day!
Given that money is one of the primary reasons couples conflict and even get divorced, it’s best to hash it out with your future spouse before making it official. We know it doesn’t sound like much fun, but your relationship will thank you for it. Plus, discussing finances will help you better understand your partner and bring you closer together.
Here are some of the most important questions you should ask your fiancé before getting married:
What assets or liabilities do you have?
Ideally, you would prefer to enter a marriage debt-free. Still, considering the fact that the average American owes roughly $22,000 in personal debt (excluding home mortgages), it’s best to be sure about your future spouse’s debt status. Take stock of any debt they owe, including personal loans, mortgages, student loans, car loans, credit card debt, and any off-the-books money they’ve borrowed from friends or family.
At the same time, you should ask them about any assets they own, such as property or stocks. This may include assets they may come into shortly, such as a trust fund or inheritance. You should also ask them if they’ve ever had to file for bankruptcy or if they would consider it in the future if the situation arises.
What is your credit score?
Another way to gauge your partner’s financial standing is to examine their credit score. Scores may range from 300 (very poor) to 850 (exceptional), and your score can affect several aspects of your life – such as whether you get approved for a mortgage or how high your insurance premiums will be. You can request a free copy of your credit report from any of the three major agencies.
Should we combine our finances or maintain separate accounts?
When a couple decides to join their lives together, it’s natural also to want to join their finances. However, not everyone feels the same. You and your partner must decide whether to combine your finances or maintain separate accounts. Both have pros and cons, so you must evaluate them carefully before deciding. Nevertheless, an open and honest conversation will help you both be confident about the choice.
Who will be in charge of day-to-day financial activities?
When one person takes responsibility for day-to-day financial activities, keeping track of them is much easier. You and your partner can decide which of you will take this on. Maybe you’ve been handling your money for a while now and would like to hand it off to someone else for a while. Here are some of the things you need to figure out when having this conversation:
- Who is in charge of creating and maintaining a budget?
- Who is responsible for paying the bills?
- Who does the grocery shopping?
- Who does the taxes?
- Who will be in charge of long-term investments?
If one person handles everyday finances, the other can balance this by taking on long-term investments. You must discuss your long-term goals and how you want to invest your money. Do you want to save and buy a home, or do you prefer investing in the stock market or mutual funds? Once you’ve made your choices, one partner can be in charge of executing the plans.
Do you have an emergency fund?
Financial experts agree that having an emergency fund is crucial, so ensure you both have enough adequate reserves to cover your expenses. You will also need to evaluate your future goals, such as starting a family, and make sure you have enough saved in your rainy day fund to keep you afloat if something unfortunate occurs.
What are your plans for starting a family?
Starting a family is one of the first things on people’s minds when they decide to get married. You may already have an idea about what they want, but you need to have a more in-depth conversation, especially concerning finances. Some of the areas you need to discuss include:
- How soon do you want to start having kids?
- How many kids would you like to have?
- Do you expect one of us to be a stay-at-home parent?
- Would our future children study in a public or private school?
Remember that even the best-laid plans don’t always follow course, so give yourself time. It would be best if you also discussed what you would do in case of fertility issues because that brings its own set of emotional and financial ramifications.
What is your policy on saving?
You likely already have a pretty good idea of whether your partner is a spender or saver. Still, you should ask them about their saving habits, such as whether they save at the beginning or end of the month, what percentage of their income goes towards saving, and what they plan to do with the money saved.
What are your spending habits?
We can all agree that expenses such as rent, utilities, and groceries are essential, but there may be others that one of you considers a must-have. Some questions you should ask them include:
- What are your non-essential “essentials”?
- Do you prefer spending cash or credit?
- What significant purchases have you planned for the next two years?
- How do you plan on spending extra money (such as bonuses or gifts)?
The average American spends roughly $18,000 a year on non-essential items, so discussing what you can and cannot give up will help set expectations for your future. Consider your current lifestyle and evaluate whether you can continue living like that after saying, ‘I do.’
How do you like to spend discretionary money?
How does your partner like to spend “fun” money? You may already know, but putting it out in dollars is a good idea. Here are some things you must discuss:
- What non-essentials are on your most-wanted list?
- What would you like to do on the weekends?
- What luxury items do you plan to purchase, and how often?
- How often do you plan on taking vacations, and how much do you expect to spend?
What are your goals for retirement & what are you doing about it now?
Presumably, you plan on spending the rest of your days with this person, so it’s worth asking about their retirement goals, even if they seem far off. You may already know the kind of life your partner wishes to live during retirement, but an honest conversation will help you figure out how much you both need to save and how to build that nest egg.
Once you’ve got that figured out, you should ask your spouse about their current contributions to their retirement fund, such as:
- Do you participate in their company’s 401(k) match?
- If your company does not offer one, do you have any other retirement savings accounts (such as an IRA)?
- Do you max out their retirement accounts every year?
Keep the Conversation Going
Life goes on, priorities change, and people do the same, so keeping the conversation going is essential. As much as talking about money before walking down the aisle is important, it’s also necessary to revisit the conversation periodically throughout your marriage. Make a standing arrangement to review your financial goals every three or six months, so you and your partner can stay synced up!
