Planning for a wedding can be stressful enough, but getting to know your fiancé’s financial history is an important step many couples may not know to take.
“Beyond evaluating wedding costs, discussing each other’s spending habits, financial goals, debts and savings should be a necessity before tying the knot,” said Todd Mark, vice president of education for Consumer Credit Counseling Service of Greater Dallas (CCCS of Greater Dallas). “We’ve met with many individuals who were unaware of their spouse’s spending habits and are now in a rocky marriage due to growing money problems.”
As wedding season begins, CCCS of Greater Dallas advises couples to openly communicate on their current financial situation, including personal goals as well as what they expect to spend on the wedding. Discussing these items early on can prevent surprises and possibly future problems in the marriage.
The nonprofit credit and housing counseling agency recommends these tips before tying the knot:
Have “the talk” before you tie the knot. Whether or not you expect to have kids and buy a house immediately or several years down the road, you should discuss how these events can affect your finances. Do you have savings for a down payment on a home? Do you know the cost of raising children, and do you believe in paying for their college? Would you expect one parent to stay home with the children? And, what about your new family members? How would you feel about loaning money to an in-law in need?
Develop short- and long-term financial goals. You may have talked about what you want to name your kids, where you want to live and whether or not to register for china, but have you sat down to discuss long-term financial goals? It’s important to review existing debt, as well as retirement, life insurance and other investments to start off your life together right.
Prepare your joint budget. Calculate total expenses and income, and figure how to save money once your income is combined. In many cases you’ll find instant savings in consolidating your expenses, but remember that you’re also combining your debt so be sure to budget for every single expense. This is also a good time to discuss who will manage the checkbook and paying bills each month.
Share your credit reports and credit scores. Know your spouse’s credit score and major bruises to his/her credit report before making your first major purchase together. Carefully review both reports and examine credit scores and debt-to-income ratios since lenders use this information when assessing loan applications.
Create a debt plan. If you or your future spouse has a significant amount of debt, take the time to develop a debt plan. Figure out what expenses you can cut to create more money to put toward debt, and meet with a professional if you don’t know where to start. Sometimes a trained credit counselor can make recommendations that you might be uncomfortable making yourself.
Decide when to merge accounts. Discuss early on the pros and cons of maintaining separate or joint accounts. If your fiancé has bad credit, maintain separate accounts for the time being, but work with him or her to pay down the debt. If you both have good credit, consider opening joint accounts for household expenses and savings, but possibly maintain separate accounts for personal spending money.
Planning for the wedding of your dreams and staying within your means. Set a budget and stick to it. Consider what’s really important to you and your fiancé by discussing everything from location, flowers, rings, entertainment, food and photography to transportation and the honeymoon. If the total is more than you can afford, cut back or eliminate those items low on your priority list. Most couples discover that celebrating their day with friends and family is much more memorable than a fancy place setting or expensive flower arrangement.
Interested in having the financial talk, but not sure where to start or how to create a budget for two? CCCS of Greater Dallas can help examine a couple’s current finances and plan for a life of wedded and financial bliss for years to come. For more information free budget and credit counseling and financial education, visit www.cccs.net or call 1-800-249-2227.
About CCCS of Greater Dallas
Consumer Credit Counseling Service of Greater Dallas, Inc. is a nonprofit, community based credit counseling and debt management service. Established in 1974, CCCS Dallas and its affiliate offices provide financial education and counseling to consumers in-person, by phone, or Internet through their 24 locations in four states. CCCS Dallas is a HUD accredited counseling agency and serves as one of nine counseling agencies supporting the 888-995-HOPE Hotline. The agency is also a member of the National Foundation for Credit Counseling (NFCC), the nation’s largest and longest serving national non-profit credit counseling network. To learn more about CCCS Dallas’ free seminars or the agency’s services, visit www.cccs.net.