You are about to tie the knot. Congratulations! Marriage is one of the biggest commitments you can make, and there is tremendous excitement that has you floating on cloud 9. However, one area that new couples tend to avoid is their soon-to-be mutual finances. That can turn into an unfortunate situation, as money is one of the main reasons couples fight. In fact, recent survey data shows that 24% of Americans say they have broken up with a partner over finances. As you prepare to take your relationship to the ultimate level, here are some financial matters you should consider before walking down the aisle. They can help you determine whether you are about to marry a financial vampire.
Bad credit
Without being overly inquisitive, it may be difficult to tell if your partner has bad credit. Perhaps he or she was turned down for a car loan or had an application for store credit denied since your relationship first began. That might be a good indication of financial troubles. Regardless of how you determine it, bad credit could be a sign of impending marital problems down the line. If you enter a marriage with someone who has credit issues, it could be difficult to make major life purchases later on, such as buying a home or a new car. It could also be an indication that your marriage will be fraught with financial issues that could lead to tension, arguments, and sacrifice.
No savings to speak of
If your significant other has little to no savings, that is a cause for concern. Depending on how old the person is, a lack of savings may indicate that he or she has no budget or isn’t preparing properly for future life events. A lack of savings may also leave the person (and you, once you get married) unprepared for an emergency, such as a major home repair or some other unexpected expense. In any case, if you notice your intended spouse doesn’t have any savings to speak of, you should discuss how you intend to tackle money management matters as a couple.
Poor debt management skills
Another sign that your relationship may be running into financial headwinds is if your partner manages debt poorly. An over-reliance on credit cards, very high balances and a monthly struggle to make card payments is a cause for concern. If your soon-to-be spouse has no clue how much debt he or she even has, you might want to investigate and create a plan upfront. A couple who is on the same page financially from the start has the best chance of staying together.
It is also important to remember that you may be responsible for your partner’s debt depending on which state you live in. In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin), both incomes and debts acquired in a marriage are shared by the spouses—even if only one of you is in debt. Therefore, you are responsible for helping your partner pay off that debt. In common law states, on the other hand, some debts are shared while others are not.
Bills are paid late or not at all
Perhaps you have observed a laissez-faire attitude in your partner when it comes to paying bills. Maybe you have seen final notice letters coming in the mail relating to overdue bills. If you notice a tendency in your partner to procrastinate, it could be an indicator of serious financial problems. Failure to pay bills on time can have a serious negative impact on your credit rating. Additionally, late payments lead to penalties, suspensions, or even cancellations of important services. If you notice bills stacking up, consider it a huge red flag and be sure to follow up.
Out of money by the end of the month
Determine if your partner is living paycheck to paycheck and seemingly out of money by the end of the month. While everyone faces financial challenges at different points in their lives, consistently running low on funds prior to payday can be a sign of serious financial problems. Living paycheck to paycheck can indicate a person is failing to budget properly or is otherwise irresponsible when it comes to managing finances. A clear warning sign is if the month begins with lavish expenditures but ends with a whimper and wondering how to make ends meet. Therefore, if you notice your partner is staying home at the end of the month and eating a steady diet of ramen noodles while waiting for payday, it should be a cause for concern.
Poor communication
One of the clearest signs that financial issues could become a serious problem in your relationship is if your partner is either unable or unwilling to talk to you about anything related to money. After all, you will need some sort of plan for managing your finances once you get married. The two of you will have to set a household budget, determine how to pay for things, and save for future life events. If you are met with a blank stare or hostility whenever you attempt to discuss money matters with your future spouse, it could mean that trouble is on the horizon.
Love is important, but don’t forget about money
Marriage is a major commitment, and love and compatibility are critical components of any good relationship. However, as you prepare to spend the rest of your life with someone, don’t forget to think about money too. If you enter a long-term relationship with someone who doesn’t manage money well, you could end up dealing with big problems down the road. If you see one or more of the signs of financial pitfalls noted here, make sure you have a discussion with your partner about your mutual finances before you tie the knot.