Before you get married, it's ultra-important to know where you each stand financially.
If you're debt-free and your intended has piles of debt, it can be a problem — on many levels. What you need to understand before you get married is why he or she ran up those credit cards. If there was an illness or some other major problem that caused your fiancé to charge up his or her cards it's one thing — if he or she is simply spending more than they earn, it's another problem entirely. In the latter case, I would urge you to do two things:
- Keep your money separate.
- Get some couples’ counseling (before you get married) from a therapist who focuses on money issues or a financial planner who focuses on emotional ones. Ask your doctor for a recommendation, or contact the American Association for Marriage and Family Therapy ().
Talking about moneyIt's never easy to talk about money. If money becomes a real point of contention in your marriage and you find you can't talk about it without the conversation disintegrating into a brouhaha, you should know that help is available.
The options: Many divorce mediators now offer a service called "marital mediation." This involves working out a legal agreement on paper, which allows couples to get past the fighting and on with the marriage. Some experts call this a postnuptial agreement.
The details: According to one of the leading practitioners of marital mediation, most couples seek help because of unresolved money issues. A wife might complain, for example, that her husband doesn't give her enough time to go over their joint tax return before signing it. A mediated agreement may specify that she get two weeks for this. If he misses the deadline, the penalty could be monetary (for example, $100 for each week he's late).
The cost: Marital mediation is usually a 10-session commitment with a mediator who'll charge $150 to $225 per hour, or a total of $1,500 to $2,250.
Should we get a prenup?Unfortunately, only about 5 percent of couples heading into marriage actually sign prenuptial agreements. (I say “unfortunately” because without one you could well end up with a costly legal mess that will make any breakup even more difficult and devastating.) You should consider one:
- If you're bringing significant assets into a marriage.
- If you have your own business.
- If you have family money.
- If you have kids from a prior marriage.
- If you are expecting a major inheritance.
If you go this route, make sure your agreement covers in the case of divorce or death: How to divide the property each of you brought to the marriage, how to divide property you acquire after the marriage, how your assets will be divided, how your debts will be handled, and whether each spouse has any financial responsibility for the other's children from previous marriages.
Most important, in order to hold up in court, a prenup needs to be fair. That means each of you needs to have his or her own attorney involved when the agreement is being drawn up, and all assets and liabilities need to be disclosed. And don't wait until the day before you head to the altar to talk about this. You don't want a court to later say you pressured your spouse into signing.
Jean Chatzky is the financial editor for “Today,” editor-at-large at Money magazine and the author of “Talking Money: Everything You Need to Know About Your Finances and Your Future.” Her latest book, "Pay It Down: From Debt to Wealth on $10 a Day," is now in bookstores. Copyright ©2005. For more information, go to her Web site, .