Before getting married, it’s wise to have a solid understanding of the potential groom’s financial situation. Without that information, brides may be ill-prepared for what lies ahead. They may enter into a marriage only to discover significant financial problems that will hold them both back. Thus, causing them to have to rethink goals and general plans. If you want to make sure you avoid an unexpected hardship. Here are seven things a bride-to-be should know about her potential groom’s finances.
1. Credit Score
Knowing your potential groom’s credit score before marriage is essential. It has a direct impact on your ability as a couple to secure various kinds of financing or low interest rates. Plus, it could alter your access to new utility accounts. As well as insurance, and more.
Ideally, brides should sit down with their potential groom and review credit scores and reports. That gives you a solid picture of each other’s financial history. Which allows you to know how the activities of aspiring spouses may impact the other once you’re married.
Additionally, make sure you review FICO scores, not VantageScores. While VantageScore is the go-to option for some lenders. FICO scores are used in the vast majority of lending decisions. Since those scoring models differ. You shouldn’t allow a VantageScore to substitute for a FICO. Especially since it may give you an inaccurate picture in regards to whether you could easily secure financing or low interest rates as a couple.
2. Debt Load
Before you get married, it’s wise to take some time to review any debts each person is bringing into the relationship. After the wedding, it’s common to combine finances, create joint budgets, and otherwise figure out how to use your joint incomes to handle various obligations.
If one spouse brings in a significant amount of debt that their partner wasn’t expecting, it can make developing a plan challenging. Plus, the spouse with less debt may resent their partner for introducing a hardship they weren’t necessarily prepared to shoulder. Since that’s a possibility, it’s best to learn about your potential groom’s debt load well before the wedding day.
In most cases, it’s wise to sit down with bank statements and – if they have one – a copy of their current budget. You may also want to see statements from any existing lenders. That way, you can check out the monthly payment, remaining balance, interest rate, and other details that give you a better idea of how hard the debt is to tackle.
3. Income
Another key part of the financial planning equation is income. If a bride isn’t aware of how much a potential groom earns, it’s smart to find that out before the wedding day, making it easier to envision how a joint budget would work after getting married.
Ideally, brides and grooms should share both their net and gross pay. That allows them to see how much they technically earn, as well as how payroll deductions impact what they bring home. However, it’s important to note that payroll deductions may change after getting married. For example, adding a spouse to a medical plan may alter the monthly cost. Similarly, having a spouse leave their current plan can result in a savings if joining their partner’s plan is less expensive.
Still, by looking at both numbers, you get a better picture of the overall financial situation. You’ll see how much they make for tax purposes, as well as what they take home, making it easier to budget.
4. Savings Account
While it may not seem like the balance of a basic savings account is particularly crucial, knowing whether a potential groom was able to set money aside for emergencies can give you clues about their financial responsibility. Having an emergency fund is often the foundation of a secure financial future, as it allows you to handle the unexpected without debt.
If your aspiring spouse has at least something set aside – particularly if their account shows they regularly work to maintain the balance – that’s a positive. Along with planning capabilities, it highlights how they view financial management and that they believe preparing for emergencies is a necessity.
5. Investments
In a similar vein to the point above, investments give brides insights into how potential grooms view financial planning and management. If they’re actively setting money aside for retirement – either on their own or through an employer-sponsored plan – it shows they’re working to ensure their financial future.
Investments beyond retirement simply highlight a person’s interest in building assets beyond what a retirement account can offer. While the investments outside of retirement plans aren’t necessities, if they’re there, they could give a bride some clues about a groom’s financial stability, priorities, and goals.
Ideally, you want to review statements for retirement and brokerage accounts. Additionally, discuss how much money is added to the accounts and how often, as that lets you know if they’re actively investing at this time or if that activity has been paused.
6. Tax Situation
Generally speaking, most people have a relatively straightforward tax situation. However, that doesn’t mean there isn’t information to find out. At a minimum, you want to know if a potential spouse is dealing with any back taxes. If so, you want to find out how they’re being addressed. For example, is your potential groom using a payment plan through the IRS, or are there wage garnishments?
Your spouse’s tax situation if they owe money can impact your financial life. For example, it may alter the amount of any joint tax refunds. While you’d still be entitled to your portion, your spouse’s portion could be seized in certain situations, reducing the amount of the total tax refund that you may have plans to use in another manner.
Even if that isn’t the case, reviewing a potential spouse’s past taxes is still a wise move. It can help you figure out in advance if filling jointly or separately would be in your financial best interests. While most couples will likely be better off filing jointly, others may want to file separately to maintain access to certain credits or deductions, allowing you to come out financially ahead as a couple.
7. Spending Habits
How a potential groom views spending money is a critical part of the relationship equation. Once you combine finances, how they treat money impacts you directly.
If you’re a saver and they’re a spender. The odds of conflict could be higher than if you both have the same perspective on spending. You might get angry at them sending money out of the door that you don’t’ think was used wisely. Which could result in a potential argument. If the disconnect is noticeable enough, your spouse may even start altering their habits, allowing them to hide their purchases to avoid a fight.
Similarly, if you’re more of a spender than they are. The situation could get reversed. They may question your choices or become irritated by your decisions, leading to disagreements.
Ultimately, you want to see where you both sit in regard to spending habits. That way, you can identify any potential compatibility issues in advance. Thus, allowing you to address them before your wedding day.
Can you think of anything else brides should know about their potential groom’s finances? Did you fail to check any of the points above? Did you get a nasty surprise after getting married and combining your finances? Share your thoughts in the comments below.
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