Financial Planning Before Marriage

Your boyfriend, girlfriend, betrothed or live-in partner may spend lavishly on you on special occasions. But don’t assume that your partner will continue to do so after you’re married — or even that he or she can afford to do so now.

Forty percent of newlyweds didn’t know their spouse's credit scores before marriage, and one in three says their spouse’s spending habits changed after the wedding, says a survey by Experian.

Because money (or the lack of it) is one of the leading causes of divorce, your marriage’s success could well be determined by the financial rules and habits you and your partner establish even before walking down the aisle.

In my book, The New Rules of Money, Rule #62 calls for the two of you to sit at the kitchen table, write down the answers to 28 questions and exchange answers when you’re finished. That book was published 20 years ago, but the rule is just as applicable today as it was then. Here are the 28 questions:

1. How much debt and what kind of debts do you have? (Make a list of all your debts, naming creditors, amounts owed to each, minimum monthly payments, the expected date of payoff and the interest rate on each loan.)

2. Are you behind on any payments, and have you ever missed a payment or ever been turned down for credit? If so, explain.

3. Has a creditor ever contacted you? (If yes, give details.)

4. What is your annual income?

5. Do you plan to work full time until retirement age? If not, and you are working full time now, what changes do you plan to make, and when? What will it cost you to make them, and how will you pay for them? (Be specific.)

6. Do you expect your partner to work full time until retirement?

7. What percentage of the family’s total household income do you expect to contribute?

8. Which of the two of you will be responsible for paying the monthly bills?

9. How much of your income are you willing to devote to the household’s monthly bills? (Give both a dollar amount and a percentage.)

10. How much of your partner’s income should your partner devote to the household bills? (Give both a dollar amount and a percentage.)

11. How much of your income are you willing to devote to savings and investments? (Give both a dollar amount and a percentage.)

12. How much of your partner’s income should your partner devote to savings and investments? (Give both a dollar amount and a percentage.)

13. How much credit card debt do you think is acceptable?

14. Would you be willing to use your income and assets to pay off debts your partner accumulated prior to marriage? (If yes, what percentage of your income would you use for this?)

15. Should your partner be willing to use his or her income and assets to pay off debts you accumulated in the past? (If so, what percentage of his or her income?)

16. Do you plan to maintain a bank account in your name only?

17. Does it matter to you whether your partner keeps a bank account in his or her name only?

18. Should the two of you have a joint checking account? (If so, should both of you contribute to it? What percentage of income should you and/or your partner contribute?)

19. Do you have or plan to obtain credit cards in your name only? (If so, how many? What is or would be your total credit limit?)

20. Does it matter to you if your partner has credit cards in his or her name only?

21. Should the two of you maintain joint credit card accounts? (If yes, which of you will use these accounts? Will the money to pay the charges come from you, your partner or both of you? In what amounts and in what frequency will the contributions be made?)

22. How many children do you want to have?

23. How soon do you want to have your first child?

24. When your first child is born, will you or your partner leave the workforce to be a full-time parent? (If yes, for how long? Which one of you will do this?)

25. Are you willing to relocate to another city?

26. Is it your intention to relocate?

27. How much money would you consider to be a windfall?

28. What would you do with the windfall? (Be specific.)

If you’re about to get married, give this a try. Even if you’ve been married for a while, if you think you and your spouse need help discussing finances, this can be a good place to start.