Money can help or hurt a marriage
Sara Gilbert/The Coloradoan (Fort Collins, CO)
19 June 2011
June is wedding season. Planning for your joint finances may be one key to your long-term success.
When you are falling in love, money management is probably not the first thing on your mind. But more than half of marriages end in divorce and money issues have been shown to be one of the root problems in difficult marriages.
So, if you want to stay in love, reaching a level of harmony in your relationship about money is critical to the long-term happiness of your merger.
While "merger" might seem to be a bit out of context here because it is a business term, our marriages and unions could be healthier if we did take more of a business look at the financial choices involved with love and money.
One good premarital tip is to begin your marriage with a clear vision of what you would like the money side of your partnership to look like.
Talk about this and don't assume that you both have the same vision. For younger couples, it is essential to share as much information as possible regarding credit reports and all financial circumstances such as debts, expenses, and income during your courtship.
Talk to each other about your past money successes and failures.
Even if you don't plan to merge all of your finances, agree on who will pay which bills. It also is important to discuss autonomy within your financial partnership.
For couples who are entering marriage in mid-life after gaining assets, homes, 401(k) accounts and debts, it is critical for each to honestly disclose the state of your personal financial affairs to each other. Sharing a net worth statement and your personal credit report (www.annualcreditreport.com) are great tools to use to begin this discussion. Some couples also get legal advice regarding options because each person may have heirs, health needs or other financial circumstances that ought to be addressed.
Communication about money is the most likely culprit for lots of marital dissatisfaction. According to a study by SmartMoney Magazine, 70 percent of couples report talking about money weekly which is a good thing but these talks must be productive.
Weekly money meetings are important for couples. Be careful not to point fingers or blame and try to consider it a business meeting.
If couples have decided to merge household bill paying duties, one person can manage that task, but it is essential to keep the other informed. Share and create goals for savings, home ownership, vacations, family needs and personal desires. Check in on these goals with each other regularly.
Decide together the ways in which each of you will have some money that is your own to spend as you wish. Some couples have more than one checking account. Some use cash. Some agree on a certain spending amount such as $100 per paycheck for example that does not require any sort of accounting to the other.
If your finances are tight, it would be best to decide up front each month, how much spending money each of you has and stick to it. There is no one-size-fits-all way to do this. Work out a system to allow both of you some freedom to make some personal spending choices.
Live below your means as a couple.
Make a monthly income and expense budget and work out together how to stick to it. Save a portion of your salaries each month and decide together how you will do this.
Look for ways together to cut expenses, save money and create a cushion to protect you if a job is lost or an illness is experienced. If you have debts, work as a team to figure out how to get them paid off.
Agree together about when and if credit cards are to be used. Credit card debt and overspending can add lots of unnecessary stress to a marriage. GreenPath offers regular courses in Fort Collins on personal finance and credit that you can attend together.
If you have concerns about debt or how to manage your money you might want to schedule a free counseling session with one of our certified financial counselors.
Call (970) 229-0695 for more information about counseling or upcoming classes or visit www.greenpath.com.
Why don't you make a date today to talk about the financial aspects and plans for your upcoming union?
Sara Gilbert is the Colorado group manager for the local GreenPath (formerly Consumer Credit Counseling Service), 1247 Riverside Ave., Fort Collins. Call her at (970) 229-0695 or send email to sgilbert@greenpath.com.