8 money questions couples need to ask - WBRC FOX6 News - Birmingham, AL

8 money questions couples need to ask

© Design Pics / Pete Stec / Valueline / Thinkstock © Design Pics / Pete Stec / Valueline / Thinkstock

By Andrew Housser

September and October are some of the most popular months for couples to marry. But if you are thinking about tying the knot this fall, do not forget that when you link your lives, you also link your finances in some ways. It is common knowledge that money causes many couples’ arguments. In fact, a recent study found that money is the biggest conflict for 35 percent of couples whose relationships are stressed.

It is smart to take a thorough look at each other’s finances before you marry, and to check back in periodically throughout your relationship. By asking these eight questions, you can build a stronger financial future – and a stronger relationship.

1. How much do you earn? Everyone should know their partner’s financial situation before signing on for a life together. Surprisingly, 43 percent of Americans do not know how much their spouse earns each year. Knowing your separate and mutual incomes will help you plan for the future and avoid spending beyond your mutual means.

2. How do you spend your money? Are you and your partner spenders or savers? Do you agree on your self-assessments? Agree on a reasonable limit that either partner can spend without asking permission from the other. (Some couples like a limit as low as $20; others go up to $500. Your answer will depend on your budget.) Also talk about whether you each use a monthly budget. You will gain insight into your own and your partner’s priorities.

3. Will you show me your credit report? Everyone can request free credit reports from www.annualcreditreport.com once a year. Preparing to marry is a good time to do this, so that you can understand each other’s financial history and current position. Agree to check your credit reports together on an ongoing basis. This will help avoid a problem 13 million Americans have – a secret bank account or credit card that they keep hidden from their spouse or partner.

4. Do you use credit cards? How do you use them? Take time to understand how your partner views credit cards, and what they use them for each month. Using credit cards for everyday expenses can work in some cases. The key is that your partner is very responsible, doesn’t spend beyond their means and pays off the balance every month. For most people, however, a better answer is to use cash or a debit card most of the time.

5. Are you in debt? What is the debt for? Many people have debts such as student loans. But if your partner does not pay his or her student loans debt, owes on credit cards or has a stack of unpaid medical bills, talk about how the debt built up and how your partner plans to handle it. After you marry, each spouse’s debt incurred before marriage will generally remain their own. Still, owing money can be stressful and can affect your standard of living. And if one person has so much debt that it has damaged a credit score, it will affect joint purchases, such as a home.

6. Have you had serious financial problems? Agree to disclose if either of you have ever had major financial issues. Have you had accounts sent to collections? Have either co-signed on another person’s loan, or had a co-signer on a loan they owe? Does your partner, or you, owe (and pay) child support? Has one of you ever filed bankruptcy? Have you had a home foreclosed upon, a tax lien or other wage garnishment? This is the time for total honesty.

7. How will we manage financial responsibilities? Will you have joint accounts or separate accounts? Who will manage which monthly bills? How often will you meet to talk about your financial status? Discuss who will handle financial responsibilities, including paying bills, setting up budgets and monitoring spending. Talk about how you will handle financial challenges. What is most important is that you maintain open communication.

8. What are your long-term goals? Do you plan to have children, and how many? Do you want to buy a home, investment property or other major purchases? Will you give money to family members? What are your long-term career and retirement goals? How much money do you plan to place on fun and recreational activities?

If this conversation identifies problems, develop a plan to tackle them together. If you need some help to work out these issues before marriage, speak with a financial planner and/or locate a premarital counselor who specializes in financial counseling. After all, strong futures are built on a foundation of honesty.

Andrew Housser is a co-founder and CEO of Bills.com, a free one-stop online portal where consumers can educate themselves about personal finance issues and compare financial products and services. He also is co-CEO of Freedom Financial Network, LLC providing comprehensive consumer credit advocacy and debt relief services. Housser holds a Master of Business Administration degree from Stanford University and Bachelor of Arts degree from Dartmouth College.
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