Money and marriage are closely wound. On the front end, marriage legally ties a couple's money and assets together. But on the back end, fights about money can often tear a marriage apart.
Recent research shows that couples who fight about money early in their relationships are at greater risk for divorce, regardless of their income or net worth. Indeed, fights about money are a better predictor of marital success than quarrels about in-laws, sex, or children.
If you're super in love, here are a few common mistakes you may want to avoid:
Not sharing credit histories
Few questions are less romantic than, "Can I see a copy of your credit report?" But financial planners consistently implore couples to swap credit histories and discuss their contents before cutting the cake.
The point isn't to find out if your boyfriend has a blemish on his credit score so you can dump him immediately and find someone with a solid 810. It's simply to avoid surprises that could later lead to arguments. If one of you has a boatload of credit card debt, and the other has a delinquency or two, you should both know that up front. That way you can help each other pay down that debt and keep financial commitments.
One thing to keep in mind is that if one of you is a big spender, and the other is a Frugal Fran, that's normal. Sixty-five percent of couples marry their money-opposites, say Scott and Bethany Palmer, married financial planners who call themselves "The Money Couple." The sooner you know your love's financial type, the fewer surprises you'll face after marriage.
Using credit cards to finance the wedding
The ring, the wedding dress, the honeymoon, the wine — all combined, the median cost for a U.S. wedding in 2012 was a little over $18,000. In many towns, that's enough for a down payment on a new home.
If an $18,000 bill for one night of romance makes you shudder, think about throwing a much cheaper party. Putting your wedding expenses on your credit card means starting your marriage off with a big chunk of extra debt — not the most practical first step in building a life together.
Trying to keep up with the Joneses
Dating doesn't end when you get married — it just usually morphs into a couples-dating-couples arrangement. You and your favorite pair may start with dinners, then move on to vacations together. Naturally, this can get complicated if you're going steady with a couple in a different tax bracket.
But you love your friends! And you hate being left out! Everyone is susceptible to this, even wealthy people who overspend to keep up with their even wealthier friends. As Mint puts it, "Financial psychologists say the drive to splurge and keep up with the Joneses is rooted more in psychology than a lack of financial skills. Animal-brain thinking, the need to fill a void or the desire to simply impress, can drive people to irrationally overspend on material items."
If you're neglecting your financial goals to keep up with Mr. and Mrs. Jones, the main thing to keep in mind is that your choices will catch up with you. If you stick to your plans — even if that means ordering the appetizers and awkwardly pointing out that you owe less when the bill comes — you'll stay out of hot water. And who knows, you may save enough to be on the same page when you all retire.
To pre-nup or not to pre-nup: This is a question every couple must face before tying the knot. It's clearly a personal decision, but financial planners recommend that couples in certain circumstances think very seriously about protecting themselves in the case of a divorce. Here, from The Huffington Post:
• Either of you has been married before and/or are bringing assets into the new marriage
• Either of you has children from a previous marriage
• You or your spouse-to-be makes substantially more income than the other
• You own your own business or part of a family business [Huffington Post]
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