"Dealing with financial matters is something any couple can do, but you've got to do the job yourselves, or it just won't get done," writes David Bach in his book "Smart Couples Finish Rich."
"If the two of you don't make your finances a priority, they won't be one."
The conversations must happen, and the earlier the better. After all, arguments about money are a leading predictor of divorce.
In his book, Bach points to the following six mistakes to avoid:
1. Not deciding who is responsible for what.
Determine who is going to pay which bills so you don't accidentally miss any payments.
"Spell out who's responsible for paying which bills," Bach writes. "You shouldn't assume that both you and your partner are somehow automatically on the same page when it comes to the question of how you are going to organize your finances and who is going to be responsible for what. If you haven't already done so, the two of you need to sit down together and specifically work all this out. The alternative is chaos and potentially major strife."
It can be helpful to have a joint account to provide the funds for the household bills, Bach recommends, but it's also important for each partner to have their own money. "Regardless of whether or not you both work, each of you should maintain your own checking and credit card accounts," he writes. "It's not a matter of hiding anything; it's that we all need a certain amount of privacy."
2. Not teaching your kids about money.
You can start training your kids on money basics as early as kindergarten.
Only 17 states in the US require that students at public high schools take a personal-finance class before they graduate.
"If you don't start teaching your kids about money, no one else is going to," Bach writes.
The earlier you start teaching the basics, the better. Every kid learns at a different pace, but you can start laying the groundwork as early as 5 years old.
"You don't have to be a financial professional to be able to teach your kids about money," assures Bach. "You can still talk to them about how you are saving for retirement and why. You can discuss with them how you handle your credit card debt, what sort of investments you are making, and how you make sure your financial practices reflect your values."
Read up on the most important things to teach your kids about money and how to do it effectively.
3. Not taking credit-card debt seriously.
You don't need any additional pressures when it comes to marriage, so tackle debt soon.
"Credit card debt can destroy a marriage," says Bach. "I don't care how much two people may love each other, if one of them is constantly spending the couple into debt, I can promise you that eventually the relationship will fall apart. If both parties are running up debts, it will simply end that much sooner."
If it's your partner who has accumulated mounds of debt, encourage him or her to work on erasing those balances as soon as possible. While you're not technically responsible for debt they acquired prior to your marriage, it becomes a collective hindrance as your finances merge.
Also, don't wait to talk about credit scores until you're about to make a major purchase. You don't want there to be any unpleasant surprises when you and your partner go to a mortgage company to get pre-approved, for example, and you're rejected because one of you has terrible credit.
The earlier you cover the topic, the better. Start by checking your credit score, which you can do as often as you want through free sites like Credit Karma, Credit.com, or Credit Sesame.
4. Not starting a college-savings plan soon enough.
Before you know it, your kid will be applying to colleges.
In many of America's top colleges, the total cost for the academic year tops $60,000, and is only getting more expensive every year. Like most financial goals, the earlier you start saving, the better. Plus, time has a way of flying by, and before you know it, you'll be responsible for a hefty tuition bill.
Bach suggests looking into a 529 savings plan, a state-sponsored, tax-advantaged investment account. These plans allow a parent to contribute up to $14,000 per year ($28,000 for a couple) for each of their children's college educations. It also allows anyone — a grandparent, godparent, or particularly generous neighbor — to contribute to the fund.
However, before you start putting away money for college, make sure you're setting aside enough for retirement. "You shouldn't even consider putting aside money for your kids' college costs unless you are already putting at least 10% of your income into a pretax retirement account," Bach writes. "Your security basket comes first. College funding comes second ... The greatest gift you can give your children is to ensure that you won't be a financial burden to them."
5. Not signing a prenuptial agreement.
If you have assets, a prenup isn't a bad idea.
A prenuptial agreement — a legal document drafted by an attorney specifying who gets what if you end up getting divorced — is a touchy subject, but it's unwise to ignore it.
"There's no sugar-coating it. Asking the love of your life to sign a prenuptial agreement while the two of you are planning your wedding does not make for great romance," Bach says. "Even though it may be a pretty difficult subject to bring up, I suggest you address it early on in your engagement (or even before you become engaged)."
To explore prenuptial agreements, you can start online and find sample contract templates at Findlaw.com and RocketLawyer.com.
6. Waiting a full 30 years to pay off your mortgage.
Interest adds up quickly.
"Thirty-year mortgages are probably the most popular form of home financing around. They are also, in my opinion, the single biggest financial mistake people make in this country," Bach writes.
The longer you take to pay off your mortgage, the more interest you'll have to pay, and interest can add up to over $100,000. To get a better idea of how much interest you'll end up paying, use an online mortgage calculator.
Bach doesn't suggest ditching your 30-year mortgage if you already have one. "The fact is, 30-year mortgages give you a ton of flexibility," he explains. "By all means take out a 30-year mortgage, but under no circumstances should you take the full 30 years to repay it ... A much smarter decision is to pay off your 30-year mortgage early."
He recommends reviewing your last mortgage payment and adding 10% to that number. "That's how much you're going to send the bank next month, and every month thereafter ... If you keep this up, you'll wind up paying off your 30-year mortgage in about 22 years ... In short, this is a simple idea that can easily save you tens — if not hundreds — of thousands of dollars in interest over the lifetime of your mortgage."
Call up your bank or mortgage company to let them know you want to pay them earlier than the schedule calls for, and make sure there are no penalties for paying it off sooner.