credit card debt in half during the next year. The plan has worked so well that they just purchased a new home in Round Lake Beach, Illinois.
GO TO COUNSELING
Though it might not sound very romantic, experts encourage young couples to consult a financial planner before marriage to devise a comprehensive plan. Much like a marriage counselor, a financial planner can help couples talk through investment fears and aspirations on the way to building a strong fiscal foundation for their marriage.
“Most married couples will plan their wedding with greater care than they plan their first year of financial interdependence,” says Keith R. Davenport, a certified financial planner and associate director of the TIAA-CREF Institute, a New York-based pension system and financial services firm that manages about $275 billion in assets for individual investors in the field of education and the general public. “Newly married people face new challenges. Not only must each spouse manage his or her own expenses but anticipate and plan for the expenses of the partner. Taking advice from experts will help couples manage income as a team and get help from an objective perspective.”
SHARE INFORMATION OPENLY AND HONESTLY
Gathering information is a key step to building a successful financial foundation. The union of two financial lives can be difficult. “Like a successful corporate merger, the marriage of finances must be done with openness and an agreement on how the new joint entity will operate,” says Davenport. He suggests couples ask difficult but necessary questions: Does my future spouse have a bad credit record or has he or she ever filed for bankruptcy? How much credit card debt will each of us bring to the marriage? What debts will become joint obligations or continue to be paid separately? Whether it’s student loans, credit cards, or car payments, he suggests that couples develop a joint strategy to pay off any high-interest balances.
“Don’t keep secrets concerning debts, savings, or investment assets; that’s a bad idea,” he says. “Communication, honesty, open-mindedness, and understanding are the key to any relationship, and when money is involved, these ground rules take on an even greater purpose.”
“One of the biggest challenges couples will face is restraint,” says Atkinson-Kirkland. “They will have to learn self-control, self-discipline, and be able to resist buying things they want versus need. To accomplish that, they must be willing to work together and prioritize to determine those things.”
For Anderson and Lisa Bynam, working with a planner helped the pair develop a strategy to meet their short-term and long-term financial goals. The Houston couple began working with a financial planner 12 months ago, 14 months into their marriage. They view their vows as an “economic partnership.” Anderson, 37, is an investment banker, while Lisa, 32, is an insurance claims specialist.
By working with Cheryl Creuzot, president of the Financial Strategies Group, the Bynams were able to discover some “very important” financial tools they didn’t see before. Now they invest in life and disability insurance, not only to build assets but also for protection