Are you ready to tie the knot? Are you involved in a relationship with someone new and you are wondering about your financial future and how the possibility of being a couple would affect that? It is important that the two of you discuss all aspects of your relationship as it gets more serious. Let’s discuss some areas that might be of concern to you.
During the dating phase it is a good idea to take an inventory of the financial situation you will be in as the relationship gets more serious. What are you bringing to the financial relationship? What do each of you owe? What do each of you own? What do each of you earn?
It is a good idea to split expenses as much as you can during the dating phase. That way you begin your relationship on equal footing. Neither party will feel that they are being taken advantage of. If you can’t afford the fancy restaurant costs, try out your culinary skills and wow him or her with that!
Is this your first marriage? If this is a second marriage, then you may be looking at this from an experienced perspective. You may be a little more wary of the financial commitment, and rightfully so. Begin a dialogue with your partner about your short term, medium and long term goals. What do you want to accomplish in your relationship together? We all want to get married to our one true love and live happily ever after, but that isn’t so practical in reality. Every relationship needs some thought provoked planning.
Who is going to pay for the wedding? The wedding itself is a complex event. It needs to be well planned in terms of what kind of wedding you want, but just as important is what can you afford? It is traditional that the bride’s parent’s pay for the wedding and the groom’s parents pay for the rehearsal dinner, but tradition does not necessarily dictate. What will dictate it is what your pocket book can afford.
It is wise to budget each area of the wedding in advance and stick to your budget or you will have a mess on your hands in the end, which would not be a good way to begin your life together. Your wedding day can be an emotional event and it is easy to get caught up in the excitement of planning it. But there is nothing worse than having a wonderful day for your wedding and then have to pay it off for years to come because you went over your limit. There are many good books and planners that can assist you in this process.
Where are you going to live? Do either of you have a house? Can you both afford to buy a house? If there is already a house purchased that the two of you will live in, it is a good idea to get an appraisal on that house at the time of your marriage. Document where the money came from to purchase your home or as a down payment for it. That way if there is ever a question in the future as to the value of the home and how much equity either one of you had in that home, you will already have it recorded. Put that information with other important papers such as the mortgage and other closing papers from the purchase of the home. Or better yet, include it in your pre-nuptial agreement.
Are both of you going to work? Are you planning on having children? If you are planning on having children, are you planning on being at home after having them? If so, for how long? How will you adjust your budget to stay at home and not work when your prior income included two incomes before having children? Do you even have a budget? If you don’t, you aren’t alone. Many couples don’t think that far ahead, but it is crucial for you to begin thinking about your future today!
Be honest with your partner about your financial situation. An interesting conversation starter might be to exchange credit reports. Are you laughing? Me too, but just think about the problems it might avoid if you are both willing to be transparent with each other now? Do either of you have significant assets or debts? If so, and/or if this is not your first marriage, a pre-nuptial agreement might be in order. Now is the time to bring these concerns to light. Better to have spent time in advance coming up with an agreement you can both live with, instead of marrying and carrying any resentment about unfinished business or unspoken concerns.
I’ll leave you with these thoughts. Anything but proper planning and delayed gratification is a recipe for failure. If we were all required to provide $100,000 in advance of marrying in order to pay for a potential divorce we might think twice about what we were getting into. Divorce is one of the most financially devastating events of our life. If you need help planning for your financial future even if you are already married, let us know.