Congratulations, you've decided you want to take the plunge and marry your significant other. This should be a wonderful time in your life, but the little voice inside your head keeps asking: What about the debt? When your partner has financial issues, it can drive a serious wedge in your relationship before you even say "I do." Fortunately, with a strong heart and some sound financial planning, it is possible to pull through and make your marriage a happy one.
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Discuss the situation with your partner. You both need to have a clear idea of how your partner's debt affects your relationship, and you both need to understand how the other feels about it.
Map out a financial plan for the next five years. You will need to help your partner make a plan to pay down his or her debt. It is likely you will need to support your partner financially while this is done. On top of dealing with the debt, you both need to consider mortgage payments, car payments, grocery expenses and an emergency fund. If you want a big wedding, that also needs to be worked into the financial plan. If you plan to have children, they need to be included in your financial plan as well. Retirement plans, savings accounts, vacations and schooling are examples of other considerations.
Find out the property laws in your state. In the United States, there are nine community property states (Arizona, California, New Mexico, Nevada, Idaho, Washington, Texas, Wisconsin and Louisiana). The rest of the United States falls under the provisions of common law. Community property laws dictate that what you own before the marriage is yours, but anything you get after the marriage is joint property; gifts and inheritance usually are the exception. Common law rules say that what is yours is yours, though a spouse has the right to claim a fair portion of your assets. It is important to know which laws your marriage will fall under.
Consult a lawyer, and sign a prenuptial agreement. This is a contract between you and your soon-to-be spouse that lays out, in writing, who owns what and who will take care of the bills if the marriage were to dissolve.
Before the Wedding
Do not accumulate more debt. Live below your means, and do not rely on credit cards or other revolving debt to survive. Do not allow your spouse to take on more debt, either. Work with what you have now, and plan on sticking to your budget for a few years.
Continue to communicate openly with your spouse. To avoid confrontations over money, it is best to plan monthly financial discussions to make sure you are both sticking to your plan. For example, make it a point to sit down together on payday, and sort out the bills together.
Keep separate bank accounts. A joint account should only be used for things you do together, such as paying bills or paying for vacations. Keep all direct deposits, paychecks and other income in your own accounts, and do not give each other passwords or access to those accounts.
Buy property in one name only, even if you are in a community property state. Until your spouse's credit improves, you will want to keep a definitive owner of all assets. Besides, major investments like real estate or new vehicles will have a much higher interest rate attached to them if you buy jointly and one of you has bad credit.
Seek financial counselling together. It improves your ability to handle your joint household expenses, and financial counselling can work to further strengthen your relationship in the face of ugly debt.
After the Wedding
Tips and warnings
- Communication is the number one way to work through financial problems in a marriage. You and your partner must be on the same page and work together, or the debt will overwhelm your relationship.
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