What To Do Before You Say “I Do”

I am at a stage in my life where I can look back at my choices and say to myself, “What on earth was I thinking?” This is especially true when I think about past relationships. As I was talking to a group of young women who were recently engaged, I saw glimmers of my past relationships in their stories and thought to myself: what do I wish someone would had the courage to say to me that would had saved me from future pain?

I then thought of the section of our CEO Liz Davidson’s book, “What Your Financial Advisor Isn’t Telling You: The 10 Essential Truths You Need to Know About Your Money”, titled “Your Life Partner May Be Your Worst Financial Enemy.” Liz mentions that “The person you spend your life with will matter much more to your financial security and ultimately to how wealthy you become than anything any financial advisor can do for you.”   As I shared this with them, I saw the cloud of love lifting and the reality of their significant other’s finances hitting them like a brick.

I told them if they are not careful, they could wind up with a financial vampire. This is someone so lacking in money management skills (either by lack of knowledge or by lack of discipline) that they suck the life out of your financial future. Before you say, “I do,” take the following steps to get a clear picture of your partner’s finances:

1. Listen and look for clues that the love of your life may suck the life out of your finances. Every person I have ever spoken to who ended marriages with financial vampires said that the signs were there but he or she ignored them. Does your partner constantly change jobs? Do their clothes, cars and lifestyle seem at odds with their income?

If you find that your potential spouse has a pattern of bad money management habits, talk about it. Consider taking pre-marital classes with a financial component.  See if your fiancé is willing to talk to a financial professional to help him or her come up with a game plan to get back on track financially .

2. Set up a meeting to review each other’s finances. In her book, Liz suggests reviewing each other’s credit reports, bank and investment statements, credit cards statements, credit scores and spending plans. You want to have an overall understanding of the financial picture you are potentially partnering with for life.

3. Discuss how you will handle your money once you are married. Will you share one bank account or have a yours, mine and ours account? How will you handle debts? How will you make major financial decisions? How do your envision your future – 100% debt free except your mortgage or an occasional but manageable car payment?

I know that these discussions can be tough but doing it can save you years of financial and emotional setbacks. As you do this, remember to think of your discussion as a “no judgment zone.” You are looking to see if there is accountability for past decisions and a game plan to get financially on track. This conversation may be one of the most difficult ones to have, but your future self will thank you.

 

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