Money talk before marriage: 5 things to know about your spouse's finances
Before tying the knot, it's essential to get to know your future spouse financially as well as romantically.
Here are five things everyone should do, says financial planner Cynthia Fick, before combing finances.
Assess each other's money habits: "It's OK that you are different," Fick says. "But you want to figure out if you are so different that you can't stand each other." Fick says people could learn more about each other's spending habits by taking a money attitude quiz or asking about each other's family and past.
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Check those credit reports: "You owe it to your partner to come clean and share the good, the bad and the ugly," Fick says. It's not being nosy or rude, because "this can become your financial life," Fick says. She points out that besides paying attention to their credit score, look at your partner's 401(k), IRAs and other accounts to get the whole picture.
Calculate your combined cash flow: Knowing how much is coming in vs. how much is going out after combining finances helps you understand "if you are making enough to live together." Discuss "if you have more than enough, what are you going to do with it," Fick says. She recommends couples to sit together and put all the numbers into a cash-flow calculator.
Compare your values: Not everyone's needs and wants are the same. Your money values show what you want to focus your time, energy and money on, Fick says. Whether you want a big house, vacations or an early retirement affects your financial decisions. "Know what is most important to your partner in life so that you can make sure if you are close to being on the same page financially."
Conduct a background check: Run a background check to see your future spouse has a record. "It is sad we need to, but it's a good thing to do," Fick says. "Just like no one wants to write a will," no one wants to do it. "But once you are done, you can move on and don't need to worry about it."