Mellody's Mail: Marriage and Money

QUESTION: I'm 31 years old and I started planning and saving for retirement two years ago. I have no excuse or reason for starting late, but I'm in a pretty heavy catch-up phase right now. I feel that I've made a lot of progress but I'm also about to go through a lifestyle change. I'll be proposing to my long-suffering girlfriend in three weeks and I'm worried that my retirement plans may suffer once I'm married. My girlfriend, though a great girl, is loaded in debt. How great the debt is, I'm not sure, as she hasn't responded to any prying about specifics. Do you have any suggestions in what is in the best way to approach the subject after I propose, how to make sense of everything she no doubt will throw on the table and how to come up with a plan that'll allow us to eliminate her debt while maintaining a commitment to saving for retirement?

ANSWER: Prior to walking down the aisle, it is critically important to discuss the state of your respective finances as well as your future financial goals. As you may already know, the No. 1 cause of divorce is money. Because many couples often dread and avoid the money conversation, financial issues can entangle and derail otherwise happy marriages. That said, the best approach to talking about this sensitive topic is to be open and upfront about your concerns, approach to saving and overall financial goals. In your case, it is important to address your girlfriend's debt issues as soon as possible in a direct and caring tone as opposed to an accusatory or demanding way.

Once you and your girlfriend have broached the topic of money and debt, you need to work together to devise a specific plan to start your new future together debt-free. First, you need to figure out exactly what you both owe -- consider credit cards, car loans, mortgages, student loans, etc. If you each have more than one credit card, create a tally of all of your bills, along with the interest rates of each credit card, to understand the full picture of your debt.