How to 'marry' finances before 'I do'
SEATTLE -- Getting married is one of the most special moments in anyone's life and one the most important decisions one can make. But it's also stressful, especially when it comes to marrying finances between two people as financial problems are one of the leading causes for couples splitting.
Janice Phillips, senior vice-president of Columbia Bank, said it's critical to have those money discussions before you get married.
"One of the ways that I think that makes the most sense is when you start to think that this might be the person and all those endorphins are floating around and everyone's happy you should start to dream together. From that collective dream, a blueprint for your lives together starts to develop. That happens naturally, but you have to have practical conversations too otherwise, you might find yourself in a 'romantically induced financial crisis'."
What if one person has a better credit score than the other or someone is bringing into the relationship outstanding debt?
"The key is to be transparent right up front. If your blueprint involves buying a house in the suburbs before having kids, and one partner's credit report needs to be cleaned up or if there's debt that is outstanding, then that should be built into your blueprint," Phillips said.
Should you have a joint account or maintain separate accounts?
"Experts say there should be joint accounts for things like household expenses, savings, large purchases, emergencies and retirement. But, it's critical that both parties have their own discretionary money."
Phillips added that money issues are generally control issues, "and if one person generally controls all of the money, that's going to be a problem."
Good advice to follow so your dreams of marriage turn into reality.