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Marriage
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His
and her money
Financial
Fitness
Managing your
Plastic
Financial
Planning
Are
you a financially confident woman |
You've fallen in love. And now you're planning on
spending the rest of your life with that special someone. As you hold
each other's hands you'll discuss how many children to have, what you'll
do with your careers and even what your perfect house looks like. While
it's important to share those thoughts, you don't want to forget a subject
that is a major cause of failed marriages.
An important element of any successful marriage is
the ability to handle money together. And that can be a challenge.
Think about it for a moment. If you put any two people together you can
almost bet that their views on money will differ. One may look at money as
a way to buy things. To another money equals status. Still others seem to
go through life without any real regard for money. And that's not
surprising. We relate to money uniquely due to a number of different
influences in our lives. Everything from our childhood experiences to our
philosophy on life will impact the way we use and view money. Each of us
will make financial decisions based on a framework that seems logical to
us.
Why is that important for engaged couples? Because
during the course of a marriage many choices that are made will be
effected by each person's outlook on money. Many disagreements that seem
to be about one issue will actually be about the way money is viewed.
Unless the underlying problem is realized, it is difficult to resolve the
argument.
Let's look at some practical steps that newlyweds
can take to help put a firm financial foundation under the marriage to
come.
-
Explore how each person feels about money. It
doesn't need to be Harvard MBA type questions. Just ask your mate how
money affected their childhood. Did they feel particularly rich or poor?
Perhaps they felt that their parents were trying to buy affection. Just
get an idea of what role money played in their families at that age.
-
Talk about your current ideas about money. Do
you have a fear of having too little (or too much) money? Is money
something that you'd rather not discuss? You might spend a lot of time
thinking about money or perhaps never think of it at all. Share your
feelings with each other.
-
Define what constitutes a major purchase. For
some people and budget situations an unplanned $10 expense is a big
deal. Other people think nothing of putting a couple of hundred dollars
on their charge card if the timing seems right. At what level is it
appropriate to consult the other before making a purchase? All this
information will be useful later in your marriage. When your partner
comes home with an unexpected purchase or gets excited over a small
increase in the phone bill, you'll have a better understanding of what
the real issues are. It might not be that long distance call to your
mother that's the problem. It could be a fear that you won't have enough
money for the rent.
-
Discuss joint checking and savings accounts.
Will you share one set of accounts or try to keep your finances
separate? This can be an emotional issue for many couples. For some,
joint assets are a way of signaling their commitment to the marriage.
For others, having a checkbook that they alone control is a sign of
self-worth that they won't want to relinquish.
-
Consider how debt will affect your finances.
One or both partners might bring debts, alimony or child support
payments to the marriage. Decide how you'll handle those costs before
the wedding bells ring. It might even be a good idea to have a lawyer
review your plans to make sure that one partner is not assuming
liabilities from the other needlessly.
-
Decide who will be responsible for paying the
bills and balancing the checkbook. If possible, you might want to
consider splitting those responsibilities. That way both partners will
have a working knowledge of the family finances. It's also advisable for
both husband and wife to sit down once a month and review financial
affairs. In many cases you'll be able to solve problems before they
become big blow-ups later on.
-
Consider whether you want to make any changes in
your wills or IRA's. The inheritance plans that were in place as a
single person are unlikely to work well after you're married. A new plan
is required. This is especially true in the case of blended families.
Decisions on inheritance and guardianship need to be considered
carefully. If you die without a will the government will decide where
your money and children go. There's a good chance that they'll make a
different decision that you would. Not updating your will can be costly.
A person who has been divorced and remarried faces a unique danger. A
will made during the earlier marriage could leave all your assets to
your first spouse if you should die without creating a new will. Even if
you ended the earlier marriage on friendly terms, that could prove to be
quite a surprise to your current spouse.
The months preceding the wedding are a busy time for
most couples. Even if you don't plan a big wedding, there are a lot of
things that will demand your attention. And many will have urgent
deadlines. Don't forget to spend a little time talking about the
unromantic subject of money. After all, it's a key element to helping you
keep that 'till death do us part' promise you'll be making soon. |