In fact, differences in handling finances is one of the top reasons couples split up. Learning to discuss finances and money with your partner will strengthen your relationship rather than damage it.
To help you get the conversation started, we’ve come up with the most important financial questions to ask before marriage.
Important questions about money to ask your future spouse:
Here is a list of 15 finance questions for you and your partner to discuss before getting married.
- How much debt do you have and where is it?
- What is your credit score?
- Would you rather spend money on experiences or belongings?
- Do you owe any family members or friends money?
- Do you use credit cards
- Are there any bankruptcies or negative financial events in your past?
- How do you handle paying bills?
- Will you have a joint checking account or keep them separate?
- Are you a saver and do you have a saving account?
- How do you spend discretionary money? What’s essential vs non-essential?
- Do you want a prenuptial agreement?
- Do you want children?
- If you have children, do you both continue to work?
- What are your retirement goals?
- Do you have life insurance?
This is a big question and an important one. Student loans, car loans, credit card balances or any other debt needs to be out in the open for both of you. It’s good to be aware of debts in case one of you loses your job and one person has to take on all the bills.
It’s also important to understand what kind of debt your partner has. Consider the following questions:
- Is there high-interest credit card debt? Is some of it secured?
- Is there any student loan debt? Is it private or federal?
- If they pass away will you become responsible for any of it?
» Learn more: Cover Your Debt with Term Life Insurance
If you decide to apply for an apartment or a loan together, you should know your partner’s credit score. If it’s so low that you won’t be approved, that’s critical information. Having this before you need housing or loans ASAP, their credit score can be rebuilt. If this information doesn’t surface until you’re in need, you’ll face some serious challenges.
If either of your credit scores need workk, there are two things you should know:
- A low credit score it nothing to be embarrassed about. Financial mistakes happen to folks of all ages and backgrounds, but especially young people.
- You can improve your credit score through various means, including:
- Review your credit report for errors. They are simple mistakes that lower your score when it really should be higher. Contact your credit bureau to resolve these issues.
- Prioritize small, regular payments. Your payment history is the one factor with the most impact on your score (~35% of your score), so it’s a quick way to see improvements.
- Focus on paying down high-balance accounts. Credit utilization comprises ~30% of your score, so any money you can put towards debt reduction is worth it. While reducing debt, try to avoid using your credit cards.
This is a great question understand each other’s priorities. Some people like to spend their hard-earned money on clothing, cars, and other tangible items, while some prefer to spend it on traveling and experiences.
Of course, there isn’t a right or wrong answer here, and it’s okay if you don’t feel the exact same way. The most important takeaway is to communicate with your partner about their financial and personal values.
See what you’d pay for life insurance
Getting financially involved with family and friends can cause an entirely unexpected set of issues. If you do owe money to friends or family, try to make it a priority to pay them back to avoid any tension and animosity.
If so, do you pay them off every month? Some people use credit cards for all expenses to build up credit and earn points for rewards, but pay them off right away. Does your mate use credit cards because they don’t have money in the bank? That’s a different story. Make sure to get on the same page as each other on credit card usage.
It’s not fun to talk about money problems you may have dealt with in the past. But it’s worse if your partner finds out on their own.
Be honest and talk to one another about things you’ve learned from past money issues.
Will one person be in charge of handling all the expenses, or will it be a partnership? Will we pool all the bills together or keep some expenses separate?
If you’re going to have a joint account, then you definitely need to have regular financial discussions. There is no hiding that pair of shoes you bought last week.
Whatever your degree of savings is, you should discuss having a savings account. It’s important to have an emergency fund tucked away in case you need money for medical expenses, vet bills, car repairs, or home maintenance.
Is a trip to the hair salon once per month essential? Is a golf course membership essential? Be sure you’re aware of each other’s daily and monthly habits that cost money. A discussion may be necessary if these current choices will hinder accomplishing your future goals.
Celebrities aren’t the only people with prenups. Prenuptial agreements are becoming more common, says Business Insider.
To the Millennial generation and younger, divorce isn’t ideal, but it’s also not taboo. As children, these people grew up with about half of their friends having divorced parents.
Millennials are waiting longer to get married. They need more time to accumulate assets. Once they are finally financially stable, they want to protect it. A prenup can protect not only their independent net worth but also not get saddled with debt that wasn’t theirs to begin with.
This discussion probably happened long before the question was popped, but it’s important to talk about the financial costs of having kids. Maybe you want one child and your mate wants three. Along with talking finances with children, you will have to think about daycare versus staying at home, private or public schooling and will you be paying for their college educations?
The cost of full-time child care in the United States is about $16,000 per year. Depending on how close in age your children will be, and therefore how many children you’ll be paying child care for, it may be more cost-efficient for one of you to stay home for a few years. Be sure to think through the pros and cons.
What different types of retirement savings plans do you each have? How much are you contributing annually?
Do you want to move south when you retire? Do you want to buy a second home? Would you prefer to spend retirement traveling? Talk about your long-term dreams, even if it seems far down the road.
Maybe you both have life insurance through work, but that might not be adequate. You want to make sure your loved ones are protected from a financial disaster if you were to die. If you have anyone that depends on you financially, then you should have life insurance.
How much depends on you and what you can afford. You can run a quick term life insurance quote and use Quotacy’s life insurance needs calculator to help you get a better understanding of how much coverage you need.
» Calculate: Life insurance needs calculator
With finances and marriage being one of the biggest reasons for arguments between couples, it’s helpful to sit down and get it all out in the open. There aren’t any right or wrong answers. It’s just great to know where you and your loved one are at with finances.
Now that you got that out of the way, go back to wedding planning. Don’t worry, if you really enjoyed the money talk, there will be more in the future.