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Sound Financial Tips and Advice For Soon To Be Weds

Financial talks with those soon to get married is kind of like talking to a wall.  Most young couples in love don’t think that finances will ever be an issue for them, after all they can just “live on love.”  Funny thing about living on love is that the bill collector doesn’t care about you “living on love” and soon when you are financially stressed it makes it a lot tougher to “live on love.”

Here is a great article for soon to be weds on how to talk about finances before they “tie the knot.”  That way they can more than just “live on love” but also live without financial stress.

Getting married isn’t just a union based on love, but one often beset by at least one partner’s financial troubles.

Before you stand at the altar, it is important to know where you stand financially as a couple. You aren’t just joining together your hopes and dreams, but also combining your money habits, spending patterns and even past debt.

As both the average marriage age and student debt loads rise, it is likely at least one partner will enter the marriage with significant debt. The average student loan debt is now more than $25,000, and the average credit card debt is almost $5,000 per borrower. These debts can cause significant stress on a new marriage. Revealing all debts early can ease the stress, and help the new couple start paying it down as soon as possible.

Getting married does not automatically make you responsible for debts incurred by your spouse before the marriage. Your partner’s debt will only show up on your credit history once you are added to the accounts. However, the debt will still affect you when it comes to your household’s income since there will be a lot less money to save, pay other bills or spend in ways that are much more enjoyable than debt payments.

Here are 10 financial tips for newlyweds:

  • Compare spending habits.
  • Don’t assume your spouse shares your beliefs about money–the spending and saving habits may surprise you. Watch how they use money. A free spender before marriage will probably be a free spender after marriage.

  • Before the wedding, reveal everything in your financial closet.
  • Be honest about your income, debts, and money problems. Bring out your bank statements from the past twelve months to show what you did with your money. Discuss your strengths and weaknesses with money.

  • Each of you should get a copy of your credit reports from the three credit bureaus.
  • This will give you a clear picture of credit accounts, debts, and how creditors will judge you. Aim to get your scores over 750 to receive the lowest interest rates for your first mortgage and other loans.

  • If your partner has been married before, find out about their financial obligations to the ex-spouse and children.
  • Avoid credit card debt.
  • The best rule of thumb is simply, “if you can’t pay for something with cash, you can’t afford it.”

    If you have a credit card balance, pay as much as you can above the minimum each month.

    If you receive gift money, a bonus, a second job or a tax refund, use this to pay off your debt. You can even make micropayments multiple times during the month to pay off your balance faster. Eat a meal at home and immediately apply the money you saved to your credit card balance.

  • Before the first bills come in, decide who will pay them and when this will take place.
    If you have separate accounts, know which account pays each bill. Also notify creditors of your name change and new address.
  • Reduce your debt-to-available credit ratio.
    This will help improve your credit score. Your monthly debt, including your mortgage, should not exceed 35% of your gross income.
  • Each spouse should have a credit card in his or her own name to build an individual credit score.
    Keep that card for a long time. Use the card for several purchases each month and pay the bill in full immediately. Building a long term payment history with one or two credit cards is an important factor in your credit score.

    –By Bill Hardekopf

    Bill Hardekopf is chief executive of LowCards.com, which compares and rates more than 1,000 credit cards. He is the co-author of “The Credit Card Guidebook.”

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