Getting Married? How to Get Your Finances in Order
If you’re recently engaged or thinking about it, congratulations! As you get ready to start the next chapter, it’s important to do your financial due diligence. You’ve heard the phrase, “mo money, mo problems” (made famous by deceased rapper Notorious B.I.G.), a concept that could apply here with your marital finances if you don’t know what to expect. So, how can you ensure you’re not unpleasantly surprised after you’ve tied the knot?
Discuss your financial background
Believe it or not, many couples get married without knowing their partner’s full financial picture. It can be difficult to discuss money during such an exciting time, but it’s important to know what you’re getting into financially. A key part of making a relationship work is communication, so get off to a great start by covering some of these bases.
Talk about credit cards
Talk about student loans
Talk through your current income and expenses
Discuss your (financial) future
Maybe you, your partner, or both of you made some credit card mistakes in the past. If so, you’re not alone. According to creditcards.com, as of May 2016, American households hold an average of $9,600 of credit card debt. It’s important to figure out how much debt you have between you and determine how that will impact your finances once you’re married. If you have credit card debt, consolidating it with a personal loan could help you save on interest and pay your debt off faster.
You worked hard for your education, but that can often come with a high cost: student loan debt. According to clevelandfed.org, as of 2015, Americans owed more than $1.2 trillion in student loan debt. It’s important to find out how much each of you owe and include your monthly payments in your budget once you’re married. Making payments consistently is key to establishing a good credit score, which will improve your chances of getting a good rate on a mortgage and other loans in the future.
What kind of lifestyle do you want to have together, and how much will that cost? How much are you earning, and does that change from month to month? Do either of you have extra financial responsibilities, such as child support or helping out family members? Talking through these questions can help you nail down your income and expenses and create a budget together. If you need help budgeting, take a look at Lending Club’s how to build a budget article for more information. You should strive to have a holistic picture of where you each stand individually and where you’ll stand together. Remember, until death do you part!
This is a good time to discuss how you’ll finance your future together. What kinds of things would you like to do and experience together? Do both of you plan to work if you have children? Where do you see yourselves living in the future, and do you plan to buy or rent your home? Determine what steps you’ll both need to take to realize your goals. If you’re not sure where to start, a financial advisor can help set you up on a path to success.
Don’t let money and undiscussed financial issues be a strain on your future. And, don’t forget that Lending Club can help, whether you need cash for a major expense (wink, wink) or a quick, easy way to consolidate your credit card debt.
With these tips, you’ll be able to set your marriage up for financial success and truly live “happily ever after!”