If you're planning to become engaged this holiday season, you're not alone.
According to a Modern Bride survey, more than 25 percent of all couples initiate their plans to tie the knot in November and December. If you're among the couples who soon will begin wedding planning, it's important to remember that while your engagement is the first step toward sharing a life together, it's also the beginning of sharing your finances with someone else.
Your first reaction may be that finances and romance don't mix, but the fact is, money issues derail many marriages. To keep your fiscal house in order, follow these steps to marital money bliss:
· Practice full disclosure. Maybe you've seen the commercial for CreditReport.com, where the young guy sings, from the basement apartment of his in-laws' home, that he wished he'd known about his new wife's credit problems before marrying her. It's not romantic, but each of you should prepare a detailed statement listing assets and liabilities, annual gross income, interests in family trusts and even potential inheritances.
· Consider a prenuptial agreement. Once the domain of the ultra-wealthy, today more and more middle-class couples, particularly those who have been married before or who have a blended family, include a prenuptial agreement in their wedding plans. A prenuptial is a written contract created before you say "I do" that addresses a range of legal and financial objectives.
While you can draft the document yourselves, and have it signed and witnessed by a local notary, you each might consider hiring a lawyer to review the agreement. Note that prenuptial agreements have been struck down in court because each spouse didn't hire a lawyer to review the agreement beforehand.
· Draft your top 10 goals. Do you want to buy a home, pay off student loans, eliminate credit-card debt, save for a vacation, have children, retire early or start your own business? Your short- and long-term goals will inform how you need to invest and manage your money. In addition to prioritizing your goals, be as specific as possible.
· Budget and pay bills together. It's easy to budget for essentials like car payments, but an accurate budget requires that you track of all your expenditures.
To accurately estimate what you spend on variables such as entertainment, keep all your receipts in a bowl for three months. When you finally tally up the results, you just may be surprised at how much you spend on "essential" items like lattes and other incidentals.
Michael L. Schwartz, RFC, CFS, CSA, is president of a Jenkintown-based wealth-management firm. He can be reached at 215-886-2122 or firstname.lastname@example.org .