5 Things to Do Before You Commit

Before you decide to marry or live with someone else there are a few things you need to do:

Talk about how you feel about money
As much as we want to believe that the way we handle our money is solely based on logic, that’s just not true. What we have experienced leads us to have beliefs about money, and the way we use it, that may or may not be logical at all. Don’t assume that you know how your partner feels.

Pull up all 3 credit reports
It’s a dirty job, but it’s got to be done. Both of you need to pull up your credit reports and talk about what you owe to whom. Some of us don’t even have a clear idea of how much money we owe in student loans, credit cards, store cards, mortgages, car loans, cell bills, etc. so it’s difficult to let someone else know what kind of situation they are getting into. Pull the reports. Make a plan.

Decide how you’re going to split the bills
As I stated in Money Matters, you can’t just think that each of you will pay 50% of the bills and everything will be okay. Does one of you make more than the other? Does one of you spend more than the other? I’m a firm believer that bills should be paid according to percentage of income instead of 50/50. If one of you makes $1,500 a month, one of you makes $2,500 a month, and the total bills are $2,000 a month then the one making less money will only have $500 of discretionary cash while the other will have $1,500 discretionary cash. Don’t less resentment break up a good thing.

Choose 1 person to responsible
All of your bills will, more than likely, have different due dates. Though both of you should be actively involved in paying bills, saving for retirement, creating an emergency fund, etc. one of you needs to be responsible for making sure the bills are paid on time every month. You can choose to rotate on a monthly basis, have each person be responsible for specific bills, or assign one person that overall task, but don’t try to juggle each due date. Late payments create extra fines and lower credit scores.

Have an emergency plan
The only constant is change. I’m not sure who originally said it, but I say it all the time. If you’re together long enough one of you will lose a job, both of you will lose friends and family members, and there may be kids involved at some point. If you start talking about the “what-if”s now, you’ll be more prepared to deal with them when they occur.

Relationships are great, but you also have to be realistic. Money is #1 reason couples break up in America. Don’t let your wonderful partner become your hated ex over a few dollars.