7 Key Questions to Ask Before Getting Married
Joining your lives together means joining your financial lives, too. You see one future with many goals. But each of you comes to a marriage with different spending habits, different attitudes about debt, and the unique assets you’ve accumulated so far in life.
Some couples find their way by trial and error, but having a conversation about money can be your first step toward financial harmony. These questions might help:
1. Will you join together all your finances?
It’s simpler to merge your accounts, of course. But you may want to have one account for household expenses you share—rent, food, insurance, etc.—and keep separate accounts for discretionary income. That way, when you want a new guitar and your partner wants the latest smartphone, you won’t put stresses on the funds allocated for your essentials.
Step 1: Agree upon a monthly budget for household expenses.
2. Are your credit scores compatible?
Your credit scores may be considerably different, and that can play into future decisions – for example, your ability to get a good mortgage rate when you’re ready to buy a home. If one of you has a lower score, that’s something you can work on together: Paying bills on time is the #1 way to improve a credit score.
Discover more tips for improving your credit score here.
Three credit bureaus—Experian, TransUnion and Equifax—gather your credit information and compile your credit reports, which then determine your credit score.
Errors on your credit reports are more common than you might think. More than one in five consumers have “a potentially material error” in their credit file, reports CNBC—a mistake that makes them seem like a bigger risk than they actually are.
Step 2: Get free copies of your credit reports at www.annualcreditreport.com and check for errors. Challenge any mistakes with the credit bureau providing it. Filing a dispute isn’t difficult and it doesn’t cost you anything. Each credit bureau has its own easy steps to follow. Find them here:
3. Are you carrying student loan debt down the aisle?
That’s likely, considering that 45 million Americans owe over $1.56 trillion in student loan debt, according to the U.S. Federal Reserve. You may have taken on debt when you were a student with big dreams but few assets. Now that you’re working, lenders consider you a better risk—so you may be able to refinance your loans at a better rate.
Step 3: Look into a student loan refinance.
4. Have you updated your insurance and health savings plans?
One of the surest ways to love and honor your spouse is to provide for the “worse” as well as the better. That means reviewing the basics: life and disability insurance. If you have existing policies, update your beneficiary information. If you don’t have insurance, now is a great time to protect your loved one’s future. Also, look into a health savings account, which lets you put away pre-tax dollars for eligible health expenses, now or down the road.
Step 4: Schedule an insurance review.
5. Do you have a will?
No? You’re not alone. According to AARP, 78 percent of Millennials (ages 18-36) and 64 percent of Generation Xers (ages 37-52) do not have a will. Plan now to relieve unnecessary estate planning issues for your heirs.
Step 5: See an attorney about a will and estate plan.
6. Who’s your beneficiary?
Do either of you have an IRA, 401(k), investment account, property or other assets that require a named beneficiary? Now that you’ll have a new spouse, you may consider updating all your beneficiary information.
Step 6: Review your beneficiary designations.
7. What are your short- and long-range goals?
Once you’ve handled steps 1 through 6, you’re ready to plan for whatever’s next. Perhaps it’s buying a home or putting aside money for a college fund. Certainly, it’s saving for retirement. That includes planning for long-term care, one of the biggest drains on retirement security.
Step 7: Schedule a retirement planning session.
Before you say “I do,” get these steps done and you’ll be on the road to a happily ever after with fewer bumps along the way.
The opinions and views in this blog post are those of the authors, and are not intended to provide specific advice or recommendations for any individual. Please consult your tax advisor regarding your individual situation. All loans are subject to the normal credit approval process.
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