Tips for Pre-Marriage Financial Counseling

Last week I discussed ways to reduce the financial strain in the event of a divorce. It occurred to me that a better strategy is to head off a future divorce by starting out a marriage on a sound financial footing. So if you or someone you know will be getting married in the near future, help them out by passing along these tips:
  • Commit to financial responsibility. First, start by realizing that even though you believe your marriage is ‘special’ and not at risk of a future divorce, the reality remains that one out of every two marriages will end in divorce. Of equal importance, realize that while financial issues may not always be the primary reason for a divorce, in most cases it’s a major contributing factor. So if you can get your finances squared away from the beginning, your chances of being in the 50% who stay married go way up.
  • Pull and share your credit reports. You’re about to combine your finances so it’s best to get a handle on where each of you stands on your credit score. If there are problems, you’ll have more time to resolve them before you join financial forces. Remember, when you get ready to buy your first home, lenders will review both of your credit histories.
  • Set short, medium and long-term goals. Let’s face it. The vast majority of couples are made up of one person who is more of a ‘spender’ and the other more of a ‘saver’. This is the perfect mix for frequent disagreements about money. “Honey, let’s go out to dinner (again) tonight.” “No. We’re saving for the down payment on a home, remember?” With finances, there’s a constant ‘dance’ between immediate and delayed gratification. Work it out together in advance and ‘automate’ saving for your goals wherever possible.
  • Divide the responsibilities. Someone has to pay the bills and handle the family finances. Often, the one who controls the money wields uneven control in the marriage. The best solution is to share the responsibility by paying the bills together. This way you both have a handle on where your finances stand.
  • Meet regularly. At least monthly, set aside time to review your goals; review last months expenses versus your budget (yes, you should have a budget); review your expected expenses for the upcoming month; and look ahead for any non-periodic expenses. This should not take you more than a couple of hours per month and is vital in order to keep your finances on track.
  • Understand the costs of affluence. In my experience, most couples have pretty lofty financial goals and expectations regarding their future lifestyle. Building a big financial future often comes at a cost in the form of long hours at work for at least one of the marriage partners. Be sure to discuss how you, as a couple, intend to balance work, money and family time.
Marriage is a wonderful institution where two people commit to intertwine their lives for the purpose of building a future together. All marriages face the spectrum of both bliss and challenges. By joining forces to solve your financial puzzle, you’ll likely find that the moments of bliss far out way the moments of challenges.