decide upon common goals–and be flexible–that will determine a couple’s financial happiness. “Marriage is a ‘we’ thing; it’s not a ‘me’ thing, so you’ve got to negotiate and be willing to compromise over finances; otherwise, the relationship just won’t work,” she concludes.
In deciding upon a course of action, she urges both parties to become involved in making important financial decisions. Otherwise, “it creates irresponsibility” in the person left out of the loop. How so? Woodhouse says the individual who never looks at the numbers never fully acknowledges how much he or she spends, or how frequently he or she uses credit cards, and doesn’t fully appreciate the consequences of the spending. Neither does that person get a clear picture of how limited–or plentiful–the couple’s resources are.
Stepp, the investment advisor, agrees. She recommends that couples create a workable budget together, separating fixed expenses, such as mortgage payments and car notes, from variable expenses, like entertainment and clothing.
If necessary, she says, figure out ways to cut corners and save more. For example, when you get a raise, that’s the perfect time to jump into your company’s retirement plan. By using the raise to save for your retirement years, you won’t feel it.
Another recommendation from Stepp: maintain good records, so if something happens to one person, the other party knows where to find all the pertinent financial documents. Sanders, of MDL Capital Management, says, “I hate the word budget. I like to call it a spending plan of action, because what you’re really doing is establishing priorities and deciding what you will spend your money on.” His advice is to first take a long, hard look at your expenses, then figure out how much you’ll have left to save and invest.
In the course of developing their spending plan, Sanders says, couples should talk about how they’ll handle any shortfalls that may pop up. What happens, for example, if unexpected medical bills arise or major car repairs are necessary?
Sanders also suggests that couples discuss their debt situation, figuring out how they’ll pay off things like credit cards, loans and any associated interest on that debt Within an agreed-upon time frame. Sanders further recommends that if one party in a relationship suffers from what he calls “spender’s disease,” the couple will have a lot fewer arguments “if the tightwad balances the checkbook.”
Finally, the experts say married couples should talk with an advisor about more complex issues, like tax planning and drawing up a will.
“And, of course, it’s never too early to start saving–for vacations, your kids’ education or even for long-term goals such as retirement,” says Stepp. Investing in mutual funds, particularly no-load funds, is a good way to get into stocks. Investors can diversify without taking on quite as much risk as they would by holding individual securities. Couples who are unsure of how much they need to put away for retirement should consult a financial planner or use a computer program.
If you follow these tips, “for richer or poorer” should result in