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Newlyweds: Plan for financial interdependence
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For more information contact:
Tanisha Warner (713) 394-3202 |
Release Date: July 5, 2006 |
Financial problems are a leading cause of divorce, yet many couples devote more time to planning their wedding than to planning their financial interdependence. Wedding planning is a great time to become more familiar with your fiancé’s spending habits, and a great time to begin budgeting together and setting financial goals.
The key to building a successful financial future is good communication from the start. Before saying, “I do”, the experts at Money Management International recommend that couples devote more time to planning their financial future, while considering these tips:
Explore your individual money styles. Are you a saver or a spender? Remember that everyone has their own money style, which has been shaped by their past experiences. Just because your future partner’s style is different does not make it wrong. Discuss any concerns and proactively develop solutions for potential problems.
Improve your creditworthiness. Because many married couples apply for credit jointly, now is a good time to review your individual reports. If necessary, begin taking steps to improve your creditworthiness; a good credit score is a valuable asset.
Pay down debt. Paying down debt could improve your credit score and increase your chances of marital bliss. Research by Schramm and Lee shows that debt brought into marriage is the number one problem area for newlyweds. Develop a plan to pay off as much outstanding debt as possible before the wedding.
Create a monthly budget. A new marriage calls for a new budget. Start by tracking your expenses for one month to determine where your money is going. At the end of the month, sit down with your partner and develop a reasonable spending plan that both of you can live with.
Establish goals for the future. Establish an emergency savings account equal to at least three months worth of living expenses. Also, begin putting money aside for big-ticket purchases, such as a car or home. Talk about where you each want to be financially in one, three, five, and 10 years.
Iron out the details. Who will be responsible for paying the bills? Will you open a joint checking account and credit lines or maintain separate accounts? How much can each person spend without consulting the other?
“Talking about money may not be very romantic, but it is extremely necessary,” said Cate Williams, vice president of financial literacy for Money Management International. “Hiding debt or spending habits from a future spouse only leads to problems. Approaching the issues honestly and openly gives you a much better chance at a strong, healthy financial relationship.”
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Money Management International, is a non-profit community service organization that provides confidential financial guidance, counseling and debt management assistance to consumers. MMI helps consumers trim their expenses, develop a workable budget, lower their debt payments and repay debts. Services are available by phone. To visit with an MMI counselor, call toll-free 1-800-762-2271- 24 hours a day, 7 days a week. Spanish speaking counselors are available. Consumers can also learn more by visiting the MMI home page at www.moneymanagement.org.
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