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Why couples should be honest about their finances before marriage

| Dec 14, 2018 | divorce |

Nearly 80 percent of divorcing couples say that financial problems played at least some role in their break-ups. That’s according to a study by Experian from last year. However, another study found that only 2 percent of married couples have prenuptial agreements. One attorney notes that they’re even less common among people getting remarried, even though they often have more to protect, such as children from their previous marriages.

Prenups provide an excellent opportunity for couples to lay their individual finances on the line. It also gives them a chance to discuss their financial goals. This can help them see whether they’re on the same page before they make their relationship official and start combining their assets and debts.

One personal finance expert says, “The prenup has a reputation for being a ‘divorce contract,’ because you only see it in action in the case of a divorce. But it’s actually a really great way for you and your partner to sit down and talk through all the financial details in your relationship before getting married.”

Even if you decide not to sign a prenup, the finance expert says that engaged couples should have “full-frontal financial nudity.” That means being honest with each other about your financial situation — including your debt, credit rating and ongoing financial obligations. These could impact your ability to get a mortgage together, make important purchases and save up to start a family.

These conversations about finances should continue after the wedding. Financial goals and circumstances change. Couples need to discuss these changes and re-prioritize accordingly their goals and saving/spending strategy accordingly.

If you’re contemplating drawing up a prenuptial agreement, it’s wise to talk with an attorney to help determine what kind of things you want your goals are for it. You may want to do this even before you broach the topic with your partner so that you have a clearer strategy for presenting the idea to them if you fear they’ll be hurt or angered by the proposal or reject it immediately. A well-drafted prenup can and should benefit and protect both partners as they enter into marriage.