So, you have finally met the person you want to spend the rest of your life with. You are emotionally ready to take that leap of faith and ride off into the sunset with your new spouse. However, before you do you need to talk about money with your future wife or husband, to ensure that there are no ugly financial surprises when you are married. After all, the number one reason for divorce in America is money problems. So, here are 7 tough financial questions to ask before you say ‘I do’.
How much debt do you have?
This is probably the most important financial question you can ask your future spouse. Debt levels for many millennials can be well over $50,000 due to student loans and credit card debt, so make sure you sit down with your spouse and go through what outstanding debt you have and what plan they have in place to pay it off. Even though, generally, you won’t become legally liable to pay off your spouse’s student or credit card debt, which they have accumulated before you got married. Their debt will still, to some degree, become your debt, as their financial situation will greatly impact your joint spending, budgeting, and investment decisions.
What is your credit score?
Sharing each other’s credit score is also important before you tie the knot, as your credit score will impact your ability to draw on new lines of credit or apply for a mortgage. If one of you has a substantially lower credit score, then the other, then it is clear that the person with the higher credit score will be the one to take on new debt when necessary. Keep that in mind, when making your financial planning for the future.
How much savings do you have?
It is also important to ask your partner how much savings they have. This will help you decide together what large purchases to make, how much you want to keep as emergency funds and what kind of entrepreneurial or investment risk you can take as a married couple in the future.
What assets do you own?
Aside from enquiring about your partner’s debt and savings, it is also important to ask about what assets they will bring into the marriage. Do they own a flat? Do they have an investment portfolio? Do they own an expensive car? Have they inherited family jewelry or own gold bullion? Knowing what kind of assets your partner holds, and how much they are worth will help you better plan your financial future together.
How much money do we earn together?
It is also important to find out how much both of you will earn together as a couple. That way you can budget accordingly each month and make joint decisions on spending, budgeting, paying off debt and investing.
Will we have joint bank accounts or keep them separate?
It is entirely up to you as a couple to decide whether you want to have joint or separate bank accounts, but this is definitely a conversation to be had before you elope. As this could lead to a very uncomfortable conversation once you are married if you both disagree on the matter.
What are your long-term financial goals?
And finally, it is important to discuss your long-term financial goals with your partner. Does he or she want to live a humble suburban life or does he or she want to live an extravagant life of luxury? What kind of house do you want to live in and what part of town do you want to raise your kids in? How much travel to you intend to do? All these things need to be discussed to prevent any issues further down the road in your marriage when it comes to making big financial decisions.
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