It’s unlikely that when an American woman gets married, she does so with a dowry – let alone one comprised of livestock or land – and while some of you might opt for ceremonies that include “love, honor and obey”, the days of women becoming their husbands’ property upon marriage are long gone. Gold digger jokes aside, most people claim that they marry for love, or at least companionship, but marriage is one of the most important economic decisions that you will ever make.
Who you marry is who you will file joint tax returns with – which means that if your husband excludes his income (intentionally or not), or helps himself to a few extra tax deductions – your signature on the return could make you liable for the additional taxes, penalties, fees, and even jail time due if you are found guilty for tax evasion (True story: Al Capone, the famed mobster, went to jail for tax evasion, not racketeering, murder, etc.). I know, your sweetie-dumpling-pie couldn’t possibly have a less-than-honest bone in his or her body. Even so, think about some of the other major economic decisions that you make as a married couple: What is his savings style? Does he save at all? Or perhaps he hoards his money in a checking account, afraid to risk it by investing it in stocks or bonds. Does he have any debts – or will he need to acquire debt, like a giant student loan, once you’re married? Once you’re married, your assets are pooled, as are your debts – which means that those $1,000 a month student loan payments will have an effect on you both.
What about his credit? Or yours? Be up front now – not when you’re trying to buy your first home together. A bankruptcy on either of your records could keep you from getting a mortgage – or even a car loan. You might want to be married as soon as possible, but think about whether it’s realistic – and whether a similar financial meltdown is likely to occur again. It may sound crazy, but a background check is never a bad idea when you’re thinking about tying your life to someone else’s. A background check will tell you if that beautiful mansion is really his – or if there are liens on it. It will also tell you if his wages are being garnished (usually for child support), along with any other red flags that should give you pause, like large amounts of outstanding debt, or defaulting on loans.
Consider your intended’s chosen profession – as a married couple, your income is pooled to support you both. Take a minute and think about whether your really can live on love alone if your fiance’s career as a mime doesn’t work out. Similarly, while you might not think that being an engineer is a particularly glamorous career, consider the benefits of a spouse who is gainfully employed. Yes, there are additional creature comforts, but additional financial income means that as a couple, you will be better able to save for your first home together, for your retirement, and even pay for your future children’s college educations.
What if you have children? The hard truth is that women take a hit to their lifetime earnings when they have children. The wage gap is the difference between what you earn as a woman, and what a man doing the same job with the same qualifications earns (or would earn), and it gets wider as you get older, as your raise this year is based on last year’s salary, and so on, not to mention the career advancement opportunities that women are routinely passed over for once they have children (also called being “mommytracked”), so who you chose to marry becomes even more important, because now that you have children your expenses as a couple have multiplied, to include the care of those children. If you drop out of the work force to care for your children or an aging relative, then you and your children will be entirely dependent on your spouse’s ability to support you all. And if your marriage ends, beyond losing your spouse, you also will be behind in saving for retirement, since those years out of the workforce mean that you now earn a lower wage than you would have had you stayed – not to mention the lower income itself.
If you’re not married yet, and have already accumulated assets of your own – a house, savings, investments – think about a prenuptial agreement. Romantic? Maybe not – but neither is being divorced and seeing those hard earned assets funding your ex’s new life without you.
Already married, and worried about protecting your economic future? It’s not selfish or wrong to think about things in terms of dollars. Indeed, dollars are the only real way of measuring how prepared you are for retirement (most women are less prepared than men), and protecting yourself. One way to protect yourself is through a “postnuptial agreement.” For couples who are already married, “postnups might be used to determine who owns assets, set a budget for household expenses or remove a business from the table in the event of a divorce. Couples also have used them to decide such things as how often the mother-in-law gets to visit or how many boys-only weekends the husband gets to take.” They also are increasingly popular for estate planning for couples – especially second marriages, to designate assets to pass to another beneficiary besides the surviving spouse.
Whether you are married, thinking about it, or have decided to skip it altogether, think about your retirement – women are shockingly unprepared financially for retirement – and unless you actually want to work until you die, it’s time to start planning so your golden years aren’t spent working at the Golden Arches.
Getting married is exciting – but when you choose who to spend the rest of your life with, think about more than just “building” your life together. Consider the actual day to day economic reality so that whether your prince rides off into the sunset with you, or turns into a frog and hops away, you can still have your happy ending.