Debt and Marriage: What You Should Know Before the Wedding
January 13, 2014
Debt can ruin a marriage, so how can you beat debt before your wedding day? Although you many not be able to eliminate debt before tying the knot, there are steps to prepare for debt in married life.
Dating and Debt
When you get married, your two families become one and so do your personal finances – the good and the bad. It’s important to find out what your spouse-to-be’s likes and dislikes are, and it’s just as important to find out about their personal finances.
Uncover this information while you’re dating and hammer out your plans for the future during your engagement. Waiting until you’re married to discover bad financial habits and low credit scores can add financial stress to your relationship.
How to Talk About Debt
Money is one of leading causes of divorce so talking about your finances should rank as a high priority. You don’t want your marriage to end before it begins, so make time to talk about finances with your significant other.
Share the debts and expenses you have and ask what debts and expenses they have. People are often embarrased by the debt they’ve accumulated so if you explain your financial situation first then they’ll probably feel more comfortable sharing.
You can also learn a lot by watching spending habits and observing certain behaviors. If they always pay with a credit card rather than cash or a debit card, this may be a red flag of credit card debt. Inquire if they pay off the balance each month.
Of course he might put your mind at ease when he says he uses his credit card to earn points, but he pays off the balance in full. Or a red flag may pop up if she says she only makes the minimum payment each month.
A soon-to-be spouse that never seems to have money is another sign of a problem. It may be a sign of living beyond their means – spending more than they’re making. The way to get to the root of the problem is to ask the questions that give you the answers you need. Before you marry someone, you need to know everything about them including income, expenses and credit history.
Credit History and Debts
When you’re married, your credit history, credit scores and debts affect your ability to make major purchases. If your partner has a bad credit score and you’re buying a house, lenders may require a higher down payment or charge you a higher interest rate. It can even cause you to get denied for the mortgage.
In the current economy, credit scores and credit history play an even bigger role than ever before. It’s important that you enter into marriage with full knowledge of the debts and credit history that comes along with your spouse. It affects your ability to reach milestones in your relationship, such as buying a home and your day-to-day finances.
Avoid Wedding Debt
Definitely avoid starting your marriage in debt because you threw a wedding you couldn’t afford. You can have a wonderful wedding and still be conscious of the amount you’re spending.
Throwing a smaller more intimate affair is back in style. This helps couples to save money on everything from the venue space and the number of invitations to the food and beverages served at the reception.
Shopping for gently used wedding dresses at high-end consignment shops or borrowing gowns from friends and family members help brides to save thousands of dollars on buying a new gown. Remember you only wear it once.
Marriage and Debt
Finances are a leading cause of divorce because money problems can cause fighting and stress that trickle into the other areas of your marriage. If you go into your marriage with your eyes wide open, you can alleviate this problem in your marriage. Talk about your finances with your soon-to-be spouse before you get married. Don’t dwell on the past and hold it over their head. Instead make a plan for how you’ll handle your finances going forward together!
This post on debt and interest rates is part of a series on credit and debt in marriage. You can also read about credit scores and interest rates, improving your credit score, and free credit reports.
How are you going to handle debt in your marriage? Leave a comment!
This article was originally published May 12, 2009.
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