What Newlyweds Should Know About Coupling Their Finances
"For better or for worse… For richer or for poorer." This is what most of us promise to our spouse when we make that marriage pledge. But unfortunately, many couples today can't seem to survive the richer or poorer parts due to poor money management skills.
"Coupling" doesn't just mean "pairing" in the traditional sense, but is also a catchphrase when it comes to finances. As we head into wedding season, it's especially relevant. Because as much as you may think no two people have ever been more in love than you are, the truth is that it could be less than smooth sailing ahead if you're not on the same page when it comes to financial matters.
"Couples have a very hard time talking about money," Joan Atwood, a Hofstra University professor of marriage and family therapy, bemoaned on an NPR "Money Coach" segment on the issue. "I would say it's the last taboo."
Ready to break the cycle? Read on.
• Set common goals. You have probably discussed this in a dreamy sort of way while dating, but turning those reveries into reality requires habitually saving to pay for them to finance your later retirement years. This is most likely one thing you may not have thought of at a time when the median ages, respectively, for brides and grooms are 29 and 31.
"While people may come into a marriage with their own assets, they need to take some time after the wedding to sit down and start getting organized as a couple," advises Andrew Peterson, a vice president at Fidelity Investments.
• Safely store your information. Quick: What's your new spouse's Social Security number? And what other vital information don't you know if a sudden need arises?
To truly mark your financial coupling, you might consider using an online service such as SugarSafe, Dropbox or FidSafe.com that lets you store, access and share all your new family's important records and documents anywhere via a web browser or iOS app.
They are free and simple to use, but are also secure enough to organize everything from financial statements, insurance policies, and real estate records to a will, IRA benefits, and even passwords.
• Investigate this option. Do you both get health insurance through your employer? Congrats. You may have just saved yourselves some money because, if it works out it's less expensive for one of you to be on the other's plan rather than pay for both.
• Be transparent. There's nothing that says you have to put all your cash into a joint savings account – but at the very least you'd be "less than truthful" by not divulging any outstanding debts – and then figuring out, together, how to pay them down. Be open with your partner, understand where they are coming from on finances, and work to find solutions that both partners can live with now and in the future.
• Get Out of Debt and Stay Out of Debt. Although it may be true that many couples are heavily in debt, that doesn't mean it is a healthy way to start a life together. Debt can be damaging to any one person, but it is a double threat when you're married because then two people are responsible for paying back the debt. Start your marriage out right by reducing or eliminating our debt and not racking it up again. Work out a plan with your spouse on how to get out and stay out of debt.
We can help with that! For help with reducing your coupled debt load, contact us today.