Money Talk Before the Wedding

Posted by: Michael S. | Feb 13,2008

This is a blog entry for all of those couples who are currently engaged and aren’t yet newlyweds.  There is a tendency in young couples to take things step by step.  When you’re engaged, you think about the wedding.  When you’re newlyweds, you think about having a child.  When you decide to have a child, you think about buying a house.

There’s one major thing that links up all of those issues: money.  It can seem pretty sorely unromantic to talk about money when you’re engaged to be married, but this is exactly what you should do.  I can understand some head-in-the-sands approach: you don’t want to think about money problems because you want to have the nicest wedding possible.  Just remember that any money you spend today will make it more difficult to buy a house and support children in the future. 

So well before you say “I do” it’s a good idea to go through your finances.  See your combined debt totals, in addition to those debts which have the highest interest rate.  You need to determine exactly how much you’ll need to pay out every month to effectively pay off debt.  This is not something that should wait until you make the decision to make a large purchase or another major life decision.  It can take years to pay off debt, as well as repair damaged credit from a high debt/low limit scenario.  The more debt you have, the lower your credit, the lower your credit rating shrinks.  Now that you’re combining debt through marriage, this issue is exacerbated even if you also are doubling your household income. 

By “combining debt” I don’t mean that the debts are going to be in each other’s name.  You still may be paying off these debts on individual accounts.  However, a lender is going to look at your overall debt picture so if you are both – individually – facing a large debt total, this is going to lead to high interest rates for any type of loan. 

Basically, the sooner you begin working on these issues, the better.  As I said, it can take years to chip away at debt and put some points on your credit ratings.  If you wait until after the wedding, a time when you might incur even more debt, then you will starting off your life together financially strapped. 

Sponsored Resources Ads by Google