7 steps you should take before you wed

Hallmark cards tells us summer is the preferred season for weddings, with August now edging out June as the preferred month. (July’s next, followed by September, October, May, April, November, December, March, February and January.)

But today’s newlyweds face a dramatically different financial landscape than their recent predecessors, thanks to tighter credit, tumbling home prices and rising layoffs. The penalties for money mistakes are higher and recovery from those errors can take longer, so it pays to be careful.

If you’re thinking about getting married in these recessionary times, here are some suggestions for keeping your union on financial track and reducing money-related tensions that can help lead to divorce:

Review your credit reports together. Romantic date idea, it’s not. But visiting AnnualCreditReport.com together and reviewing your files from all three credit bureaus will ensure you both know what you’re getting into. Make a plan for paying off any toxic debt (such as credit cards and payday loans) and polishing up your credit scores.
Have a spending plan. Review your income and your expected bills as a couple. If your basic expenses–shelter, utilities, food, transportation, child care, insurance, minimum loan payments–will exceed 50% of your take-home, look for ways to trim. Discuss the mechanics of who will pay bills and from what account. Whether you have separate accounts, joint accounts or a combination matters less than that you agree on an approach, and have enough flexibility to change if your system isn’t working. (Many couples find putting one person in charge of paying bills works best, but the other person needs to be kept in the loop about the family’s financial situation with weekly or at least monthly updates.)
Track your spending. This is especially important if you share an account. You don’t want to wait until the end of the month to discover you’ve spent your income twice over. Desktop software like Money or Quicken can help, or use online trackers such as Mint, Wesabe or Quicken Online.
Make a commitment to honesty. Lying about purchases, having secret credit cards and hiding money or property isn’t okay; it’s financial infidelity that can undermine your marriage. But:
Consider a slush fund. Even if you combine your accounts, consider setting up an “allowance” so each partner has money to spend with no questions asked. The amount depends on your finances, but it should be enough to cover a few indulgences and maybe gifts for the other person. Trust me: fewer fights, more happiness.
Set a “discussion” point. It’s smart to discuss all major purchases together before you buy, but what constitutes “major” depends, again, on your financial situation. For some well-off couples, it might be any purchase over $500; for others, it might be anything over $50.
Don’t overspend on the wedding. It’s pretty simple, really: if you can’t afford to pay cash, you can’t afford it. Borrowing only makes sense if what you’re buying will eventually appreciate in value (such as a house) or allow you to increase your income (such as a reasonable amount of student loans or business loans). Weddings don’t qualify. If you don’t have the cash, save up until you do. If the wedding date’s already set for this summer, do some triage now to trim costs and make paying off any wedding-related debt a top priority.