A marriage is just as much a business partnership as it is an emotional one—a fact that becomes even more apparent during a divorce. Having all your financial cards on the table during your marriage can prevent surprises when it comes to divvying up assets, says Jean's guest, Violet Woodhouse. One of the nation's leading divorce lawyers and author of Divorce and Money: How to Make the Best Financial Decisions During Divorce
, Violet explains why it's important to be informed about your spouse's financial life, even if you're not thinking about divorce.
- Spouses should be financially accountable to each other—there may be separate bank accounts or credit cards, but there should be a free exchange of information.
- Create a budget and stick to it. If you choose to give each other "mad money" every month, that's fine, but make sure to stay within your limits.
- Agree on a financial plan together. Develop your own contract about what you intend to do financially as a couple, a time frame for achieving your goals, and what you'll each contribute.
- Set financial goals that you want to accomplish together, like saving for retirement, a new home or starting a family. Then make sure that you're both working toward those goals in your spending and saving.
- Financial differences can create huge problems in marriages, but money isn't the real problem—it's a lack of communication. Communication, negotiation and compromise are the keys to working through financial issues.
Violet also advocates sharing as much financial information as possible before marriage, including credit reports, debts and assets. "You don't want to marry someone with horrible credit," she warns, noting that it could affect a couple's ability to purchase a home in the future. People usually show the best side of themselves when they're dating, Violet says, but their financial problems may go unseen. "Marriage is tough enough," she says. "You don't want your marriage sabotaged by unpleasant surprises."