All too often, newlyweds barely make it through the honeymoon phase. They’re soon at each other’s throats–bickering over money, one of the most contentious issues in marriage.
He says she goes overboard with credit cards. She says he’s a tightwad who refuses to ever splurge a little.
Or maybe he didn’t find out until after the wedding that she’d taken out a mountainous student loan every single year she attended college; and she didn’t know about those late payments, outstanding judgments or that auto repossession botching up his credit report.
Any of these scenarios sound familiar? If so, you’re not alone. For many of us with significant others, chances are there’s something about your partner’s spending habits or financial profile that you had no due about until after you got hitched. After all, you probably spent those candlelight dinners gazing into each other’s eyes and planning romantic weekend getaways, right? Unfortunately, very few couples in the throes of newly found love bother to take off their rose-colored glasses and exchange them for a microscope to examine one another’s financial records.
That’s exactly what committed couples should do, though, according to financial planners and relationship experts. Because now that you’ve tied the knot–or are planning to–money issues promise to loom much larger than when the two of you were just dating. “It always stuns me when people think that love is enough to work out any financial difficulties they may encounter,” says Violet Woodhouse, CFP, a certified family law specialist whose company Violet P. Woodhouse Professional Corp. is based in Newport Beach, California. “Marriage is a high-stakes deal. Although love is blind, you can’t be blind to the person you’re marrying.” For evidence, take a look at the nation’s divorce rate: currently, about 50% of all nuptials are broken.
To open the eyes of newlyweds and longtime partners alike, we asked three experts on couples and money for advice about how to minimize financial problems in a marriage. Their suggestions boil down to three words: Disclose. Discuss. Decide.
HONESTY IS THE BEST POLICY
During the courtship period, a little mystery goes a long way toward boosting attractiveness. But once a couple starts talking marriage, shrouding salient financial facts in mystery is a definite no-no.
Experts say the first thing couples must do–preferably around the time they get engaged–is to disclose all money-related issues to one another. Woodhouse, coauthor of Divorce and Money (Nolo Press, $24.95), says couples can get off the on-ramp to Splitsville by exchanging financial documents like tax returns, credit reports, checking, savings and investment account statements, paycheck stubs, budgets itemizing monthly expenditures and job benefits packages.
It’s important to go through the hassle of comprehensive disclosure because experts say this helps guarantee that there will be no surprises down the road. And the unexpected can lead to unnecessary marital stress, Woodhouse cautions. Equally important, though, is that honest communication about your financial picture now can have a carryover effect, setting the stage for candid discussions about other aspects of your relationship.
Still, some people feel that asking