His and her debt.
Being newlyweds can be in for some unpleasant surprises if they don't share detailed financial information before tying the knot. The risk of discord is especially high if a diligent saver discovers that a new spouse comes with a dowry of debt.
If you are planning to get married or have recently wed and haven't discussed finances, consider exchanging your credit reports. These include information such as open lines of credit, overdue debt, wage garnishments and any bankruptcy in the past several years. "It's not going to be the most comfortable thing," says Matt Schulz, senior industry analyst at CreditCards.com. "The truth is you are a team pulling in the same direction, and one person's debt has a significant impact on the household finances."
If one of you has a lot of debt, it's important to find out the reason. Student loans taken out while earning an MBA are less of a problem than credit cards maxed out during periodic spending binges.
A spouse often wants to help a mate pay off debt, although he or she may be unwilling to forfeit years of savings to do so. One option is to have the entire paycheck of the person with the loan go toward paying off the debt, while the other spouse picks up the household expenses, says Smalenberger. That gives the debt disappears, while the others sees the family's net worth go up without forfeiting savings.
A spouse often wants to help a mate pay off debt, although he or she may be unwilling to forfeit years of savings to do so. One option is to have the entire paycheck of the person with the loan go toward paying off the debt, while the other spouse picks up the household expenses, says Smalenberger. That gives the debt disappears, while the others sees the family's net worth go up without forfeiting savings.
By Elieen Ambrose, Kiplinger's Personal Finance
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