Seeger: Managing finances after you say ‘I do’Written by Guest Author | | GuestAuthor@toledofreepress.com
Marriage has been poetically described as “two hearts that beat as one.” But navigating the management of financial issues makes the hearts of many married couples miss a beat.
When planning a wedding and marriage, the financial component of marital life is often overlooked or avoided. Yet money issues remain the most often-cited reasons for divorce. It is not always “till death do us part” as it is “till debt do us part.”
We often avoid talking about money because it is uncomfortable to do so in our society.
There is a phenomenon some relationships develop known as financial infidelity, which can be described as telling lies to your partner about what you spend money on or keeping him or her in the dark about stashes of cash you may have somewhere.
Many people think something as innocent as saying that you have had an outfit for a long time even though the tags are still on it or not telling your partner about that special little account you have at the bank is alright, but really this is a form of financial infidelity.
According to a Harris Interactive poll, it is estimated that one-third of all couples with combined finances have committed financial infidelity. Of those couples, 67 percent said they had a resulting argument, 42 percent said it caused less trust in the relationship, 11 percent said it caused a separation and 16 percent said it ultimately ended in divorce.
This is why Bonnie Weil, a well-known New York psychologist and relationship therapist, refers to financial infidelity as the No. 1 relationship wrecker — even more than sexual infidelity.
So what is so difficult about financial issues and why do so many problems stem from money matters? It largely comes from differences in spending styles. A lot of monetary behaviors are learned in formative years, from how our parents handled — or didn’t handle — money.
There is a lot of correlation on how one was raised and their style of monetary management.
Further, since many more people today are marrying later in life, they bring more assets — as well as debt — to the marriage than in past years, which just adds to the complication.
But fear not! Love will find a way — along with financial planning and management skills that can be learned and applied. All couples need to have a
serious discussion on money matters, no matter how uncomfortable it may be.
The first step is to examine your current financial state, asking what are your current assets and liabilities? You must be honest. And while you are at it, you might as well look at your individual credit scores as well. This will give an idea of your partner’s spending habits and financial management skills. Then, write down your joint short-term and long-term financial goals and make sure these goals are measurable.
Step two is to develop a realistic budget. There is a website, www.mint.com, that can help you set up a budget and track your expenditures from your bank account, update your budget records automatically and warn you if you are going over a budget item. Be sure to look at expenses such as cellphones plans, health insurance and auto insurance as these may be cheaper if combined in a family plan or package.
It is recommended that couples have one joint checking account, but keep their individual checking accounts. Decide on what you are going to pay for jointly and then each make a financial commitment to fund that account while maintaining the remaining funds for personal expenditures.
Having your own “allowance” reduces the friction involved with individual expenditures that the other party may not approve if it were to come out of joint funds.
For more helpful hints and basic financial planning for newlyweds, visit the website www.newlywedfinances.com.
David W. Seeger is president and CEO of Great Lakes Federal Credit Union. He may be contacted at (419) 246-5905 or 1 (800) 442-3488 or via email at email@example.com.