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The right time to talk finances is before you say 'I do'

(Article by Melcher Martinez from San Antonio Business Journal, March 2002)

Spring is approaching and advice abounds in bridal magazines and on television talk shows about getting married. You know where to find the perfect wedding dress, the most romantic wedding settings and how you can find quality, affordable wedding services.

The dress, the cake, the location -- all of those are important. Yet there's one planning element often missing from the intended couple's to-do list, and it could be one of the most important elements of building a happy life together. It's a serious talk about your finances.

No matter how sure you are that you and your intended can overcome all obstacles, they do arise, and one of the biggest causes of early marital strife is money. Arguments about how you spend it, where and how you keep it, how much you save and how much you owe are common among newlyweds.

Consider this: Divorce lawyers say that money is the one issue that most couples say they argue about -- followed by children. Also, a recent report by the American Academy of Matrimonial Lawyers notes that the most common causes of couple conflict are poor communications and financial problems.

Couples can best protect themselves against financial conflicts by having a heart-to-heart money talk before the marriage. That means fully and frankly discussing financial goals and habits. Here are several money topics you should discuss before you say "I do":

Long-term financial goals -- Will you want to buy a house in the next few years? How about a second car? Does she want to quit her job and return to college for an MBA, thus delaying big purchases? Do you plan to have children?

Your long-term goals most likely will require a solid strategy and a disciplined savings plan. Try to agree on these goals in the beginning. Even if they change, you'll still be way ahead.

What you owe and your credit history -- Both of you have the right to know if your intended has a troubled credit history. You can work together to improve your credit as a couple, and you should make decisions about incurring future debt.

For example, you may decide not to use credit cards unless you pay the entire outstanding balances each month.

It's also a good idea for both of you to obtain copies of your own credit reports and to share them with each other. If your credit as a couple is "in good health," you'll have even greater confidence going into the marriage.

If it's not or you have credit issues you weren't aware of and should resolve, now is a better time to address them than after the marriage.

How you'll conduct your financial transactions -- Perhaps you'll want to maintain separate accounts. On the other hand, you may want to combine accounts, especially if it will result in better rates and lower fees.

Maybe you strongly prefer your financial services company and like to do your banking at its supermarket location around the corner. Maybe he shops at a different supermarket and won't find this very convenient. Perhaps you do all your banking online, but he's not Internet savvy and doesn't plan on changing. Talk about it and resolve these issues before the wedding.

Retirement planning -- You think you're both too young to worry about retirement? Think again. All too often couples begin their financial planning for retirement long after it's too late to create the sort of life they hoped for. Talk about it now.

Where do you want to be financially in 20, 30 and 40 years? Where do you want to live? How much can you afford to put away toward retirement? One or both of you probably are working. What do your employers offer?

Set your retirement goals and consider talking with a financial planner now to figure out how you can reach them.

Insurance checkup -- Do you have renter's or homeowner's insurance? What about car insurance? Have you insured that new diamond ring on your left hand? And what about the new furniture and china? If you do business with a full-service financial institution, your banker can connect you with an insurance specialist who will help you meet your needs.

Don't leave financial talk out of your wedding planning. It will give you a great chance to discuss and set your financial goals and help you agree on issues that, left ignored, easily could be the cause of continued conflict in your marriage.