To Have and Hold Till Debts Do Us Part

They’re the antithesis of the “happily ever after” story: the tale about the woman whose house was about to be seized to pay an old tax debt that her new husband never mentioned. The saga of the man whose savings were raided and his credit ruined by his wife’s compulsive spending. The story of a marriage that was aborted at the last minute when the wife-to-be realized that her fiance drained a checking account that they’d both funded to pay wedding expenses.

In short, they’re the financial horror stories that experts maintain lie at the heart of the vast majority of failed marriages.

It’s not romantic. It’s not the stuff of which Hollywood movies are made. It tends to be a bigger societal taboo than talking about politics or sex. But talking about money--before you tie the knot--is pivotally important, experts agree.

“There’s no way of avoiding the fact that you are going to be entwined in money issues for the rest of your married life,” says James J. Chesterton, a certified financial planner with Brighton Financial Planning Inc. in Clinton, N.J. “If you can’t discuss them now, you are certain to have problems. This is not something that you can tiptoe around.”

Just what money issues must you discuss?

They range from the mundane to the extraordinary, says Kathy Stepp, a certified financial planner with the Overland Park, Kan.-based firm of Stepp & Rothwell, and a spokeswoman for Citibank’s “Money Matters for Newlyweds” program.

To start, you need to flesh out the day-to-day issues, such as who will pay the bills and whether you’ll merge your checking accounts or keep them separate. If you’re keeping your finances separate, you need to decide whose money goes to pay which bills.

While you’re at it, it doesn’t hurt to talk about why you want to do things the way you’re planning, Stepp adds. Knowing whether or not you and your spouse agree on the “whys” will help determine whether you’ll still agree on the “whats” if your financial situation changes down the road.

“One person may be saying, ‘I want to save a lot of money now so that we can send our kids to college later,’ and the other might say, ‘Wait a minute. I paid for my own education, and I want our kids to, too. I think it builds character,’ ” she notes. “Discuss these things now. It will help enormously later.”

In addition to the practical, everyday matters, it’s important to discuss your dreams, says C. Diane Ealy, an Arizona-based behavioral scientist and co-author of “Our Money, Ourselves: Redesigning Your Relationship With Money” (American Management Assn., 1999).

“Talk about your vision of your life together,” Ealy suggests. “That encompasses everything--how you want to make a living; where you want to live; what you want your day-to-day life to be like; how many kids you want to have. All of those issues involve money.”

Also think about specifically where you want to be at various points in the future, such as five years, 10 years and 20 years from now, she adds. Don’t make the mistake of being vague. Often, people have fuzzy definitions of their longer-term goals, which makes it difficult to achieve--and even express--what they want. To have a meeting of the minds, you need to have a detailed vision.

To create one, Ealy suggests that you mentally walk through a typical day in the future. Start with getting up in the morning. Are you walking down the stairs in your expansive home, or can you reach the coffee pot in your tiny apartment from the side of your bed? Are you living in the city or the country? Do you have a big yard, or a small patio? Are both you and your spouse working, or is one of you staying at home to take care of the household and, possibly, the kids? Do you have high-paying, high-pressure jobs? Or, in your mind’s-eye, do you see yourself in a mellower profession, even if it is less lucrative?

If you’ve been married before and are merging stepfamilies, the financial discussions are more complex, says Judith Martindale, a certified financial planner in San Luis Obispo.

When you’re discussing whether to merge your finances or keep them separate, for instance, you need to consider how that decision will affect your respective children.

Do you need a prenuptial agreement? Have you thought about your wills? Often, a husband and wife will leave their assets to one another. But have you considered what will happen to your kids if you die first? Will your spouse leave everything that remains to his or her kids and nothing to yours? Is your new husband or wife willing to help put your kids through college? How will you handle financial demands from your dueling families? Will everything be divided equally? Will more be given to the kids who appear to need more? Do you agree on your money approach--i.e., when and how you ought to provide financial support to your respective offspring?

These types of sticky issues can derail a second marriage in record time, experts agree.

“The reality is, when you are talking about money, there is a practical side and there is an emotional side. The emotional side is what’s difficult,” Chesterton says. “You may think that everything you are doing is perfectly fair, but when it comes to dealing with the individuals, it can become a bone of contention. That’s one of the reasons that money tears families apart.”

Finally, you need to sit down with a pencil and paper and exchange hard financial information, Stepp says.

“I don’t know that you need to actually exchange tax returns or balance sheets, but you do need to sit down and see what you have here,” she says. “List what you own and what you owe, how much money is coming in each month and how much is being spent.”

What do you do if you’re simply too uncomfortable about money to discuss it?

If you’ve been paying attention while you were dating, you should already have picked up on various subtle signals that indicate how your prospective spouse handles finances, Stepp says.

“You can tell the kind of people who are going to have credit card problems because they’re always the ones at big gatherings who want to put the check on their card and collect cash from everyone,” she says. Meanwhile, compulsive spenders--and tightwads, for that matter--are spending lavishly (or are acting cheap) all the while you know them. Pay attention.

Think about the practical side of your intended spouse. What kind of car does your intended drive? Is it expensive or cheap for someone with his or her income? How does he or she dress? Where do you go for dinner? Does he or she buy things compulsively or think out every purchase? Does your spouse-to-be constantly pull out a credit card or pay with cash? Does he or she use money to control you? Do you consider him or her tight or practical, classy or lavish? Are you comfortable enough with how your intended handles money to economically link yourself with him or her for the rest of your life?

If the subtle signals and the formal discussions raise red flags--or if there appears to be a conflict between what your spouse-to-be does and what he or she says--you may need to investigate further, Martindale says. Individuals with some of the worst marital finance horror stories say later that they suspected a problem before the nuptials but were assured that all was well. If necessary, ask to exchange credit reports, tax returns, balance sheets or any other financial information that makes you comfortable.

If you just can’t broach the subject yourself, suggest that you and your spouse-to-be take the Citibank “Financial Bliss Quiz.” (You can get a free copy of the quiz by calling (800) 669-2635, or you can take the somewhat expanded and modified version on this page.

“The good thing about the quiz is it can be the bad guy,” Stepp says. “It’s not you asking all these nosy questions. You’re just filling out a quiz.”

But realize that money matters don’t get easier to talk about once you’ve wed, the experts agree.

“When you put things aside and decide not to discuss them, you create a barrier of mistrust,” Chesterton says. “If you are living jointly in a household, you are going to have joint assets and joint liabilities. You need to have a financial discussion.”

Test Your Fiscal Compatibility

*

Are you and your spouse-to-be in sync financially? Take this quiz and find out. S5