Archbishop's web site Denver Catholic Register Parishes Catholic Pastoral Center
January 9, 2002
Financial preparations should also be part of wedding planning
A clear picture of spouse's financial situation can head off money problems
So you've rented the reception hall, hired the caterer, completed the pre-Cana course and outfitted the wedding party.
Check, check, check and check.
But have you looked over your beloved's credit report?
It may not sound very romantic, but when survey after survey list money problems as the main reason for divorce, a clear picture of your future spouse's financial situation may help to head off marital difficulties.
Taking on a spouse's bad credit rating can have repercussions that last longer than many marriages, financial advisers say. And even when a husband and wife are on the same financial footing, different spending habits or contrasting visions about how money will be spent can mean disaster for a couple.
``In addition to whatever financial portfolio each bride and groom brings to the altar, there's an `emotional portfolio' brimming with messages learned from parents,'' said Barbara Eisner Bayer of The Motley Fool, an Internet-based financial planning service. ``If they conflict, a couple could be on an investing collision course.''
In its 2001 report, ``Time, Sex and Money: The First Five Years of Marriage,'' the Creighton University Center for Marriage and Family found that the third, fourth and fifth most problematic areas for the recently married involved money.
``Given, in the United States, the economically based and materialistic social system and the emotional value attached to either repeating or reacting to the economic values of the family of origin, it is hardly surprising that financial issues were problematic,'' the report said.
Financial counselors recommend that about-to-be newlyweds with a good credit history take steps to protect themselves from a spouse with financial problems.
When those problems are serious, never buy anything jointly with the debt-challenged spouse, never co-sign any loans, keep credit card accounts separate and never buy anything ``that you can't afford to pay by yourself,'' recommended adviser Ann Coleman of The Motley Fool.
``Unfortunately, chances are pretty good that, sooner or later, that's exactly what you'll end up doing,'' she told one prospective bride in her advice column.
If the groom ``balks at the idea of totally separate accounts and is not just as concerned about protecting your good credit as you are,'' Coleman's advice was even more blunt — don't marry him.
For less drastic solutions, Adriane G. Berg of MSN MoneyCentral offers these steps to ``financial compatibility'':
•Track both partners' expenses for a month to determine where money is going.
• Estimate expenses for the next 12 months, drawing up a ``cash-flow calendar'' noting likely expenditures and income.
• Create an emergency fund that could cover expenses for three to six months.
•Hold a weekly meeting to discuss bills, investment options and new purchase issues.
``As long as both of you are well-informed and communicate about bank balances, insurance and investment results, it's OK if one takes charge and the other follows,'' Berg said. ``The problems exist when one insists on being the headmaster or the other abdicates any financial responsibility at all.''
In the marriage, ``there are silent partners and managing partners,'' Berg added. ``Both have their function and place.''
Even those with complete financial compatibility will have to consider some money matters when getting married, however. A look at the documents that make up your financial life may show the need for major revisions.
For example, all insurance policies, including any disability policy provided at your job, will have to be updated to show your spouse as a new beneficiary. If you are involved in a partnership or shareholder's agreement, that paperwork will need to be reviewed to see if your marriage calls for any changes.
To get the most for your money, look into any spousal benefits that might be provided by your employer, automobile group, trade association or travel group. Make sure your spouse is listed as the emergency contact at your health club, office or school.
Other documents that might need updating include your will and power of attorney, any deed or real estate documents to which you are a party, bank and brokerage statements, pensions, IRA, annuities and other retirement accounts.
``None of these issues is fun, but they're definitely necessary,'' said Berg. ``You can avoid later conflicts and unwelcome surprises by working through these issues early in your marriage.''
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