You've found your one and only, but before you start addressing the invitations, you'll want to learn everything you can about your future spouse or companion. How he or she handles money should be near the top of the list. Talking about money will help you uncover potential hot spots and develop understanding and respect for how you each think about finances. Here are five questions to get you started.
Warning: These are very personal questions, so tread lightly and be prepared to answer as well as ask.
1. What does your balance sheet look like?
If you plan to sign a prenuptial agreement, full disclosure of assets and liabilities by both parties is a must. However, even if you skip the pre-nup, you should each draw up a balance sheet and share it with your partner-to-be.
A balance sheet or net worth statement is simply a snapshot of your financial condition that shows what you would have left if you sold all your assets and paid off all your debts.
A negative net worth might be a sign of trouble, but first take a hard look at the numbers. Did your fiance just finish medical school with a bunch of student loans, or is it car loans and credit card debt tipping the balance into the red? It makes a difference.
2. What is your credit rating?
Experian's Website also contains information on how to interpret the printout. Take advantage of the opportunity to check over your own credit report. Mistakes are not uncommon.
Why should you care about your partner's credit rating? His debts are in his name, and unless you transfer them to a joint account, you're not responsible. However, joint purchases such as a house will be affected by his credit rating. You may get stuck with less favorable terms such as a higher interest rate or a smaller mortgage. The credit report will also give you some insight into how your partner manages debt.
3. Do you want children?
Of course, there are lots of reasons to discuss having children, but with a price tag of $200,000 each plus college costs, having a child is a financial decision as well.
The discussion shouldn't stop there. Will both of you continue to work full-time? What kind of child care would you arrange? What happens if the baby is sick and can't go to the baby sitter? Who has the more flexible schedule or is willing to adjust work hours in an emergency?
4. How was money handled while you were growing up?
Financial planners often ask this question as a way of gauging clients' attitudes toward money. The answers can be revealing. If money was a hushed subject in your partner's family, he may be uncomfortable discussing finances with you. Perhaps money and gifts were used to show affection in your own family and you will be deeply hurt if your new spouse doesn't continue the tradition.
Obviously, neither one of you is a clone of your parents, and free-spending parents sometimes produce thrifty children, but some insight into your partner's background can help you understand his attitudes today.
5. What are your financial goals?
Discussions about dreams and goals will probably span the length of your marriage, but it's important to begin talking before you say, "I do." Start with the big picture: When would your partner like to reach financial independence? What is his idea of the perfect career? Would he ever want to branch out on his own? Does he think parents should pay for every dollar of their children's college education?
Then move on to more near-term goals: buying a house, saving for big-ticket items such as vacations and cars, developing a budget and tracking expenses.