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Tying the Financial Knot
November 3, 2014 | Vanessa Richardson; excerpted from Thrivent magazine
Financial questions for couples to discuss
Before marriage, you and your future spouse will have many conversations: How many kids? Where will we live? What church will we attend?
But questions just as important might be: How much is in your 401(k)? Are you a spender or a saver? What's your credit score?
By understanding your future spouse's money situation and attitudes, you can work together to build a solid future. Here are six financial questions to ask before you tie the knot.
1. What are your financial goals?
"Ask each other, 'Where do you want to be in five, 10 and 25 years?'" says Benjamin Munsch, a Thrivent Financial representative in Spicer, Minnesota. Other topics to discuss are what kind of lifestyle you want, whether you want to have kids, how often you want to go on vacation, your ideal career ladder and what you envision for retirement.
2. How will we spend & save money?
Find out if your future spouse saves money or spends it freely. If you're both spenders, be careful – and make sure you're earning enough for your lifestyle. And if you're opposites, you'll need to work on staying in sync on financial goals.
3. What's your credit history?
While it may be awkward to ask for personal information like your future spouse's credit report and amount of debt owed, it's crucial to know, says Erin Hente, an advice specialist at Thrivent Financial. "If either of you has a poor credit record, that can prevent you both from qualifying for a mortgage or getting a low interest rate on a joint credit card."
4. How will we pay the bills?
Talk about how you'll split duties when it comes to saving, spending and paying your household money, advises Hente. Also, decide about your bank accounts. Will you pull them together, keep them separate or have "yours, mine and ours" accounts?
5. How will we protect our financial future?
Financial security includes everything from an emergency fund to what will happen if one of you dies. You'll also want to talk with a financial representative to make sure you have enough life insurance, and update the beneficiary designation on any existing life insurance contracts or investments to ensure that your future spouse is named as heir.
6. How will we talk about money in the years ahead?
This conversation should be a starting point, not the last one you have about your finances.
Remember, there are no right or wrong answers to any of these financial questions. The important thing is to be honest with each other so you can start building a strong financial union.
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