Financial advice for newlyweds

For Richer or Poorer

by Gary Foreman


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You've fallen in love. And now you're planning on spending the rest of your life with that special someone. A date has been picked for the wedding. You'll discuss a lot of things before the big day. Not only will you talk about all the wedding arrangements, but also your dreams for the future. 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.

And 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 will 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. Because we each 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. We each will make financial decisions based on a framework that seems logical to us.

Why is that important for our engaged couple? Because during the course of their marriage they will make many choices that will be effected by their outlook on money. And many disagreements that seem to be about one issue will actually be about the way they view money. Unless they realize the underlying problem it will be difficult to resolve the argument.

Let's look at some practical steps that our newlyweds can take to help them put a firm financial foundation under their marriage. They can begin by spending some time exploring 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.

Next, spend some time talking 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. Our love birds should also spend a little time talking about 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.

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There are other issues to consider. Will you share joint checking and savings 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.

It's possible that one partner has brought some debts, alimony or child support payments to the marriage. You'll want to 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.

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You'll also need to 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.

Our happy couple should also consider whether they want to make any changes in their wills or IRA's. The inheritance plans that they had in place as a single person are unlikely to work well after they'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 state will decide where your money and children go. There's a good chance that they'll make a different decision that you would.

Related: Writing a Will That Will Protect Your Heirs

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. But, please 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.


Gary Foreman

Gary Foreman is a former financial planner and purchasing manager who founded The Dollar Stretcher.com website and newsletters in 1996. He's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com. Gary shares his philosophy of money here. You can follow Gary on Twitter. Gary is also available for audio, video or print interviews. For more info see his media page.

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