Valentine’s Day: Getting Your Finances in Order Before Getting Engaged

Roughly 10% of marriage proposals occur on or around Valentine’s Day, which means over 200,000 couples will get engaged over the Valentine’s Day weekend.  Not many of them, however, have taken the time to become intimate with each other’s financial situations, which is one of the reasons why divorce filings have reached 50% of the marriage rate.

Having the “finance” discussion well in advance of getting engaged can often save a marriage or reveal financial secrets about your partner that kill the deal.  Here are some suggestions…

Discuss your indebtedness and other liabilities, in advance – “I didn’t know you had $20,000 in credit card debt” is not something you want to say on your honeymoon.  Having the “credit” chat well in advance of committing to marriage is a smart, albeit uncomfortable, discussion.  Find out what kind of credit card debt, student loan debt, or delinquent debt for which your partner is liable.  It’s a fair and reasonable request considering you’ll be marrying into it and you’ll eventually discuss it anyway.

Share your credit scores with your fiancé – “I love your eyes, your sense of humor, and your 800 FICO score.”  Credit scores are a very individualized measurement of credit risk but any JOINT applications for credit you make with your spouse will consider both your scores and your spouse’s scores.  And, a bad spousal score will likely result in higher interest rates for the family.

Beware of ex-spouse debts – “I promise I’m not still seeing my ex-wife…but I am still paying off her credit cards.”  Divorce decrees do not cancel joint debts with ex-spouses, which means IF this is your new spouse’s second time at the alter you might be marrying into ex-spouse debt.  Discuss any joint credit obligations you may still have with ex-spouses and old boyfriends/girlfriends because they don’t disappear with a new marriage.  You probably won’t invite the former spouse to Christmas dinner…why deal with his/her credit card bills?

Is your soon-to-be spouse bad with money? – “I thought the due date was just a suggestion.”  There are now over 70,000,000 people in this country with FICO scores below 650.  Are you engaged (or about the get engaged) to one of them?  Poor credit management skills don’t go away with nuptial vows and studies have shown that it’s hard for irresponsible money managers to break their bad habits.  Point being, you might have to manage the household finances if you want it done properly.

I’ve never been accused of holding my tongue so I won’t start now…If you don’t know about your fiancé’s credit management practices then you don’t really know your fiancé.

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.

Categorised in: Credit Report, Credit Score, Getting Credit, Money & Identity

This post was written by John Ulzheimer