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All You Need is Love and a Financial Plan

February 06, 2013

It's the season of love, but before couples take the next step in their relationship, they should discuss their personal finances. Taking the next step is not only a marriage of hearts but also a marriage of finances. It's no secret that people can become blinded by love, but if you stick to a plan, your financial situation doesn't have to be impaired.

An important component of any romantic relationship is a solid financial footing. Consider the following topics for discussion with your true love:

Be mine, or yours? Will you and your spouse-to-be keep finances separated or combine them? Consider individual money styles and find a system that works for you. One of you might be a financial planner while the other is a financial spender.

Love’s Cost. Calculate costs and discuss how bills will be paid. Both may contribute to the bill payment, but who will physically write the check to pay the bills, monitor the investments and take care of the taxes. Consider setting a date every month to review and discuss finances. Maybe start reviewing your finances together every payday.

Sharing Credit. It’s important that spouses are aware of the others’ credit situation. Marrying a person with bad credit will not drag down your stellar record. However, your other half’s credit will be factored in when applying for joint financing. Knowing ahead of time will help you to plan more strategically.

Cupid's Arrow. Couples should develop a plan to shoot down existing debt, starting with the balances that carry the highest interest rates. Whether or not the pair works as a team or alone, debt must be tackled.

Sweet Savings. Saving as a couple fosters teamwork and is essential in times of financial hardship. Decide how much you want to save as a couple and do it automatically from your paychecks. Consider investing this money in an IRA or Certificate of Deposit.