Congrats, you’re engaged! Now it’s time to talk finances.

By Jenny Hoff

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By Jenny Hoff, Photo by Mathieu Stern

New Year’s Eve is the most popular day of the year to get engaged. In fact, 40% of engagements happen between Thanksgiving and Valentine’s Day, making this month a big one for celebrating love. It’s also a great month to have a very honest conversation about money. Not to quiet the butterflies of anticipation for new beginnings, but financial stress is one of the top causes of divorce, and it can be avoided by having those important conversations before saying “I do.” The following questions will help you get started.

What’s your credit score?

Many couples share credit cards, buy homes together and make purchases where credit scores matter. A bad credit score isn’t necessarily a deal-breaker, but you should get to the bottom of why they may have one. Is it due to a life crisis that they’re still clawing their way out of? Are they cash-only buyers, leaving them with no credit cards on which to build a score? Or do they habitually miss payment deadlines, rack up debt and neglect their financial health? Getting to the bottom of why your partner might have a low credit score can help you find a way to build better habits to increase the score and keep it there.

How much do you make and spend each month?

According to a study conducted by Fidelity, 40% of couples who live together don’t have a clear idea of how much their partner makes. That means almost half of people pair up having no ability to make a real household budget, to gauge if they’re bringing in more than they’re spending or to be able to plan for emergencies. Even if you’re planning on keeping your finances separate, you will likely share costs of rent or mortgage, groceries, bills, etc. You should know if your partner has the money to carry their weight or if they spend more than they earn (or more than you earn!).

How do you budget?

If the answer is, “I don’t,” it’s time to get to work. You’re likely thinking of spending a lifetime with your partner, which means retiring together and potentially raising a family together. Those milestones require money, a budget and a sense of financial responsibility. Even if you’re both living paycheck to paycheck right now, it’s a good idea to sit down and make a sample budget for at least your first year.
Are you willing to sign a prenuptial agreement? This isn’t for every couple, but with people getting engaged and married later in life, many enter the union with a decent net worth they’ve built up on their own through years of work. Divorce is a financial train wreck. Every lawyer meeting costs thousands of dollars, and if you can have a “just in case” agreement already drawn up (look at it as an insurance policy you hope to never use), you can save yourselves from financial ruin if separation ever happens.

If the answers you’re getting to these questions are shocking or disappointing, it doesn’t mean you’re incompatible. It just means you should start working together now to solve some of these problems and potentially meeting with a financial counselor before getting hitched so you can walk down the aisle with confidence that you’re entering into an emotionally—and financially—healthy union.


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