So he got down on one knee and popped the question. He said "Yes!" What happens next? Maybe say yes was the easy part. After calling family and friends to announce the good news, the real work set. Let's take a look at some questions and guidance that could give a couple of real life. I'll call them and Timmy Lailah.
Timmy and Lailah, like a lot of couples met, dated for a while and eventually fell in love. Timmy got up his courage saved up some money and asked for her hand in Lailah marriage. Well, now the ring is on his finger and sizes correctly. They had a nice dinner and then "Wham!" Reality hits. Where we're married? Who is going to be there when we tie the knot? Where are we going to Earth after Jump the broom? We meet? Who is going to be the flower girl? And let's not forget what cummerbund color Timmy is going to wear? All these things are important and many involve monetary decisions but they are temporary. After the wedding are old news. Let's peer into our crystal ball and watch some future problems.
Who will pay the bills after Timmy carries Lailah through threshold? I would advise Timmy and Lailah to sit and have a discussion about this. They should come to an agreement of how family invoices will be paid. There are many different ways that couples have managed this topic. Many couples pay all expenses of the families of a cosigned. In most cases, each spouse has a separate account that can use at their discretion. Perhaps personal accounts can be used for mad money, golf or whatever makes them happy. In some cases, couples have simply divided the responsibilities of certain bills. Maybe Timmy will take care of the mortgage and utilities, while Lailah covers payment of car, grocery stores and the like. There is no cut answers, but the discussion should happen as soon as possible.
If it hasn't happened already, Timmy and Lailah should also have a heart to heart discussion about their past. No, I do not mean past lovers. I'm talking about their past. Timmy has a sparkling credit history? The Lailah has a ton of student loan debt to bring along for the ride? Everything must be put on the table. There may be some things that affect the decision of how to file taxes going forward. For example, if one of the spouses has tax related matters following them around it might be best to keep relatively separate finances. In this way, if there is a sort of withdrawal or seizure may be attenuated any potential fallout.
None of this stuff sounds terribly romantic, but it is incredibly important. Nothing can put a damper on romance down the road as money problems. Having an open and Frank discussion now can go a long way to keep the fires of burning love story later.
Good luck to you Timmy and Lailah! I'm rooting for you.
Lee Baker, CFP ?
Pinnacle financial services