Tips To Keep $$ From Ruining Your Marriage

GENERIC: MARRIAGE & MONEY, couple, graphic of bride and groom, money CBS/AP

So, you're getting married. You've planned the wedding, booked the honeymoon, talked about the important things, like whether or not you want kids. But have you talked, seriously, about money? You don't want to find out too late that you and your spouse are a bad financial match. In this column, Early Show money maven Ray Martin shares some suggestions to keep money from ruining your relationship.

Coupling and Finances

Ben Franklin once said, "Keep your eyes wide open before marriage and half shut afterwards." That's good advice, especially when it comes to your finances.

When two people become a couple, whether they just live together or get married, they form a new relationship with their money. They also confront a new set of financial decisions. Should they combine their finances? How much should each contribute to the couple's bills? Who will manage the couple's finances? These are some of the basic money matters that couples need to think about.

The "Money Talk" for Couples

Most couples talk about having children, but they rarely talk about money before getting married. It may not be romantic, but it's no less important.

Here are some of the money issues that couples should discuss before mixing their money with their relationship:

  • What You Own and Owe: Each person should write up a simple list of his and her assets and debts, including descriptions, amounts and monthly payments for each. Getting married does not necessarily require taking ownership of each other's assets and responsibility for each other's debts. In fact, the debt one partner brings into the relationship, such as student loans and credit card debt, is not the legal responsibility of the other.

  • Credit Scores and Problems: What is each person's credit score? Has either person filed for bankruptcy or had credit problems? It's a good idea to get this out in the open and resolve how to deal with it, because it will come out later, when you apply for a joint loan for a car or a home. Also, ask if there are tax problems, such as non-filing of tax returns, tax liens or nonpayment of taxes owed. These problems could cause an unsuspecting partner grief when they file a joint tax return. One way to guide this discussion is to have each person get a current copy of his and her credit report and review it with each other.

  • Sharing Bills and Expenses: If there are two incomes, discuss what each earns and how to apportion household bills and shared expenses. One way to do this is to divide your take-home pay by the joint take-home pay. Apply the resulting percentage to the household bills and pay that amount. While the partner who earns more will pay more, each will pay the same proportion of expenses as compared to their income. Some couples assign expenses -- you pay the rent, I'll pay for groceries, phone, cable/Internet bills, etc. Others use one partner's income for all expenses and try to use the other income to build up savings for goals such as a down payment for a home.

    Setting up Financial Housekeeping

    There are three commonly used systems for money management to consider when setting up financial couple-hood:

    1) The Traditional: Pooling both partners' money into one account. This is the best way to have a clear view of what is coming in and going out in financial terms. But the challenges will include keeping organized and maintaining control of the checkbook. Wars have begun over lesser issues.

    2) The Modern: Each partner maintains his or her own accounts and responsibility for the bills is divvied up between them. This provides the ultimate in control for those who are set in their ways or just so financially incompatible that this is the only way to coexist financially. There will be double the number of checks to write and records to keep. Unless your bank offers a relationship deal, you may also get dinged for extra fees. It will also add extra work to paying for any joint obligations, such as mortgages and loans.

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