Money Talk for Couples
This article was written by Nina Swartz (Needleman) and published in the St Louis Women’s Journal in June/July 2005.
How would you like some tips to make sure everything goes smoothly - not just for the big day - but from the wedding till "death do you part"?
BEFORE THE WEDDING
Have a Money Talk with your betrothed before the big day.
Are you/he a spender or saver? Where is each of you on credit card debt? Student loans? Ever experienced a bankruptcy? What are the debts and assets being brought into the marriage?
While many couples share a household before marriage, few address mutual finances before being legally bound. One way to get a head start on joint finances is to discuss the amount of debt being incurred by the wedding. When costs are a factor, prioritize expenses. If one person's priority is a good live band, and the other's is a fancy wedding dress, perhaps you can cut costs by having bud vases at tables instead of fancy centerpieces. Or you could eliminate or downsize guest mementos. Of course you want the day of your dreams to be magical. But you don't want to have years of bills to pay afterwards.
AFTER THE WEDDING
As soon as the thank you notes are finished, have your first Money Talk as husband and wife. What are your lifestyle goals - house, vacations, cars? What are your family goals - children or child-free? Do you value religious schooling? Is college a must-do? This is the ideal time to set some joint money strategies to ensure progress towards your shared goals.
This is also a perfect time to update your benefits at work. Make sure he/she is updated as beneficiary on your retirement plan, disability insurance, and life insurance. Compare benefit packages - if she has better health insurance, get on her plan. If his retirement plan has better choices, maybe that's the one that you maximize, while just contributing to the match for hers. Do you know your investing profile? Are you conservative, balanced, growth oriented or aggressive? It's normal for husbands and wives to have different risk comfort levels when it comes to investing. Just make sure you find a happy medium for the joint accounts, so that you'll be comfortable with the results.
When you depend on two incomes for household needs and lifestyle, it is usually worth considering the purchase of at least a nominal amount of life insurance. While chances you'll need it in your 20s or even 30s are pretty low, the cost is also phenomenally low. While many people wait until they have children, it's hard to beat the cost savings of buying early when you're young and in good health.
Embarking on a life together is exciting. Open and regular money talks are one of the best ways to ensure a happy marriage forever.
