6 Money Matters to Consider Before Getting Engaged

by Hank Coleman

6 Critical Money Questions to Ask Before You Get EngagedAlmost everyone fights about money with their friends, family, coworkers or spouses at various points in their lives, but this can be a particularly touchy topic for couples. Do you know the hard, critical money questions to ask before you get engaged?

A survey from Coupon Cabin found that almost 50% of divorced or separated couples wished they had talked more about money before getting married.

Money Questions to Ask Before You Get Engaged

To prevent this from happening to your own relationship, here’s a few money matters you should consider before getting engaged to the person of your dreams:

Lay It All Out on the Table

Do you know your future fiancé’s credit score? Do you know whether they like to pay off their credit cards’ statement balances every month or only make minimum payments on all their cards? Are they a saver or a spender?

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A poll from the National Foundation for Credit Counseling (NFCC) found that 68% of respondents had negative feelings about discussing money with their fiancé, and if you’re part of this majority, then it’s time to learn how to talk about money.

Honesty in discussions about finances isn’t always pleasant, but it’s necessary to reduce the potential for long-term relationship conflicts. After all, these troubling statistics from Credit Donkey’s Financial Infidelity in Marriage survey don’t lie:

  • 68% of respondents said their current or previous relationship(s) were marred by financial deceptions
  • 43% of respondents didn’t know their partner’s credit score prior to marriage
  • 31% of respondents who combined finances after marriage admitted to lying to their spouse about finances

Since money is more likely to cause fights within a relationship (more than chores, kids, sex, and in-laws), it’s better to lay everything out on the table before entertaining the idea of marriage to make sure your partner is right for you.

Money isn’t a romantic conversational topic, but it will become an inevitable part of your daily lives together until they day you die, so don’t be afraid to crunch numbers and discuss finances with your partner.

43% of couples didn’t know their spouse's credit score prior to getting married.Click To Tweet

Sharing Assets, Debts, and Bills

If you live in a state with “community property” laws – Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin – then you could be liable for your spouse’s debts incurred during the marriage.

Usually, student loans taken out before marriage are excluded from this liability – unless you were a cosigner – but nevertheless, it’s a good idea to know exactly how much debt you might be on the hook for before popping the question.

In addition to understanding your future spouse’s perspectives on money, you should set aside time to calculate both of your assets, debts, and monthly bills. Some questions you might want to consider:

  • How much student loan debt do we both have? At what interest rates?
  • How much credit card debt do you have? I have ______.
  • What other debts do we owe? Are we liable for each other’s debts once we marry?
  • What kinds of assets do we have (individually and collectively)? Should we sign a prenup? (generally for couples where one person has significantly more assets than the other)
  • Do we want kids someday? How many kids can we afford with our income?

Doing math and getting up close and personal with your debt figures in the midst of dreaming about a wedding and a happily ever after can be a drag. However, it’s so important to understand exactly where you both are at – financially speaking – before planning the rest of your lives together.

A survey cited by CBS News found that only 24% of couples created a budget before getting married, which means the majority of couples seem to take a “hope for the best” approach to trusting their partners don’t have any secret, 6-figure debts to their name.

Don’t put your personal financial situation at risk. Don’t put your relationship at risk for money squabbles later. Organize all of your debts and assets, and determine who would be responsible for paying them once you’re married (don’t forget monthly bills!).

Credit Score Gaps

If you or your partner is terrible with money management, then one of you might have a bad credit score. This is another critical topic of pre-marriage discussions because it could hinder your desire to jointly buy a home together and secure other loans at reasonable interest rates.

If you have a good credit score and you find out your partner has a less-than-savory credit score, then it’s important to examine what factors led to that score. Bad credit can be a source of deep shame for many people, so approach the topic objectively and gently, with questions like:

  • What are your credit limits? What’s your typical credit usage per month?
  • Are there ways to pay more than the minimum payments on your existing debts right now?
  • Would you consider downloading a reminder app to stay on track of your credit card payments?

A study cited by the Chicago Tribune reported that just 12% of couples shared similar spending habits, which is highly indicative of potential problems with credit cards and debt later on.

Don’t make your partner feel bad for having a poor credit score. Instead, try to find ways to help them improve so you can both enjoy the benefits later on when you apply for apartments, auto loans, and mortgages.

Cost of the Wedding

After you discuss your long-term financial strategies – and decide you’re still pretty compatible when it comes to money – then it’s time to discuss short-term finances, like the wedding itself. Many couples across America manage to spent less than $10,000 – which is still a considerable chunk of change – but the average cost of a wedding is actually $26,645.

In the budgeting process for your upcoming wedding, your main question should be: “are we in a financially secure position in our lives, enough to afford an engagement ring and wedding?”

There are plenty of ways to save on wedding costs, and it helps when your families are willing to chip in for your special day. Nevertheless, you should lay out all the costs – invitations, dress, tux, favors, centerpieces, floral arrangements, venue rental, food, drinks, cake, etc.

And, then create a timeline for your wedding date based upon your personal preferences and projected financial situation to ensure all your bases are covered before you walk down the aisle.

Still in School?

If you and/or your future fiancé are still in college, then marrying before graduation could impact your financial aid. Since FAFSA includes your spouse’s income for calculating financial aid packages, you could potentially miss out on need-based aid if your new spouse makes enough money to push you over the edge.

Luckily, there are many financial aid options for married couples, so this dilemma shouldn’t play a major deciding role when it comes to marrying your partner (but it’s still important to consider!).

Preparing for Retirement Together

When asked about their best piece of advice for newlyweds (and engaged couples), 57% of couples in Fidelity Investment’s 2015 Couples Retirement Survey responded with “save as early as possible for retirement.” The second-best piece of advice in the survey was “make all financial decisions together” (41% of respondents agreed).

What does this mean for you and your future spouse? If your goal is to remain together “until death do us part,” then questions about retirement will inevitably arise over the course of your relationship. Questions you want to mull over with your partner include:

  • What age do we want to retire by?
  • What standard of living do we want to maintain in retirement?
  • Do we have access to pensions or employers’ 401(K) plans or should we open up IRAs?
  • Are there family histories of cancer, Alzheimer’s, or other age-related illnesses that might impact our health care spending when we’re older?

Even if you’re still young, planning for retirement is crucial for the well-being of both you and your relationship. The 2012 American Institute of CPAs survey found that 49% of couples argue about unexpected expenses, while 32% argue about insufficient savings.

These two issues become even more important during your retirement years when you no longer have steady incomes from employment. So, be sure that you bring up the issue of retirement planning before getting engaged.

Pop the Question or Wait?

As you can see, there are so many questions to ask, things to discuss, and numbers to crunch before you seriously entertain the idea of marrying someone.

However, if your partner’s perspectives on money closely align with yours and you’re both relatively stable in your financial situations, then proceeding with marriage can be a wonderful decision. Just remember that you should regularly communicate about money after getting hitched t0o!

Do you know the hard, critical money questions to ask before you get engaged? Did I miss any good ones?

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About Hank Coleman

Hank Coleman is the founder of Money Q&A, an Iraq combat veteran, a Dr. Pepper addict, and a self-proclaimed investing junkie. He has written extensively for many nationally known financial websites and publications. Hank holds a Master’s Degree in Finance and a graduate certificate in personal financial planning. Email him directly at Hank[at]MoneyQandA.com.


Hank Coleman has written 593 articles on Money Q&A. Learn more about Money Q&A on Twitter @MoneyQandA and @HankColeman.


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{ 1 comment… read it below or add one }

Josh

Great reading here!

It has been an absolute blessing to generally be on the same page financially as my wife. We talk about our finances all the time and I’ve discovered in the past that if she is not involved with something that I want to do it’s NOT GOING TO WORK.

It took us months to come together on budgeting and now that she simply has access to the budgeting software and is able to add her own transactions we have been on track!

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