Why You Must Have the Money Conversation Before Marriage
If you are in a serious relationship, you probably know your partner’s favorite color, his dream car, and at least a few embarrassing stories from his childhood. But do you know his credit score? If not, then you don’t really know your partner at all, and this lack of knowledge can come back to hurt your marriage.
Money Talk is Sexy
Okay, so having the money talk actually isn’t that sexy, but a strong, happy marriage definitely is. When you marry someone, they bring their personal baggage along and their money issues, too! These days it is not uncommon for grads to leave school with $50,000 or even $100,000 worth of debt, which can take decades to pay off. Additionally, poor spending habits, a lost job, or a healthcare emergency can lead to significant debt or even bankruptcy. These are all things you need to know before you tie the knot with your Prince Charming.
Why Money Matters in Marriage
You will not be responsible for your spouse’s pre-marriage debt if you should get divorced (unless you co-signed on a loan), but a high amount of debt and/or a low credit score can affect your marriage in a variety of ways:
- Difficulty getting loans – If your spouse has poor credit, you may start hearing a strange word from your loan officer when it comes time to buy a new car, get a mortgage, or take out a business loan: No.
- Higher interest rates – The worse your spouse’s credit, the higher interest rate you can expect if you do manage to get a loan or a shared credit card.
- More burden on you – If you have good credit, you may feel pressure to take out loans or credit cards in your name alone, putting the burden to pay squarely on your shoulders. If your spouse does take out a loan in his name alone, you may need to co-sign, which will make you responsible for paying it if your spouse can’t.
- Less disposable income – Let’s say that you and your spouse both bring home $5,000 a month in income. If your spouse has to pay $1,000 on his student loans, $500 on his car loan, and $250 in straight interest on his credit cards, his monthly income might as well really be $3,250.
- Less financial freedom – If your spouse must spend a big portion of every paycheck paying down debt, you may not be able to afford a down payment on a home (if you can even get a loan), a nice vacation each year, or the ability to go out for a nice dinner with friends. These things matter, and resentments can grow, especially if you’ve been a financial Girl Scout and have little debt and great credit.
Can Love Conquer All?
Disparities in credit scores and debt may not seem like a big deal to you when you are in love, but it will matter once the infatuation stage begins to fade. That’s because after the wedding bells die away, you will need to find a way to make a life with your new partner, and money will play a big role.
That isn’t to say you should reject suitors out of hand who have lots of debt or a poor credit score. Some debt can be smart – for example, most people can’t become a doctor without going in debt for med school, and we all make financial mistakes. The point is that it is important to discuss these things with your intended before marriage and to come up with a plan so you don’t get any bad shocks during marriage.
In fact, if there is a big discrepancy in money, either way, it may be worth considering writing a pre-nuptial agreement to protect the partner with the greater amount of assets. At WIFE.org, we offer an entire archive of educational articles about finances and relationships written just for women.