Besides candlelight and romance, a dis-cus-sion of money matters should be on the agenda when you decide to get married.
Most people perpetuate the financial natures of their parents. As a result, an engaged couple often combines totally different attitudes about dollars that can ignite long-term conflict if matters aren't addressed from the start."We've talked a little bit about finances, and have decided to keep separate checking accounts for each of us and also a joint savings account to pay common bills," said Jill Johnstone of Cave Creek, Ariz., who will wed Andy Short May 13. "I guess I am independent and like to handle my own money."
Right now, the two 27-year-olds are earmarking the funds in that joint savings account for wedding expenses.
"We're thinking of going to a premarital class that covers everything from finances to having kids," said Short, who notes that both are making payments on relatively new cars and will also bring credit card debt into the marriage.
It's important to discuss all money matters up front. As any marriage counselor can tell you, arguing over every dollar is murder on a marriage.
"Based on studies of thousands of couples, money is the No. 1 thing they fight about when planning a marriage, and the problem tends to get much worse later if it's not dealt with," observed Howard Markman, co-director of the Center for Marital and Family Studies at the University of Denver and co-author of the book, "Fighting for Your Marriage" (Jossey-Bass Publishers, San Francisco, 1994).
Interestingly, financial arguments aren't a function of how much money a couple has, but rather a pervasive problem that can worsen even as the couple's bank account grows. One partner may be a spender, the other more of a saver, and tension is constant. Discuss whether you came from a family of spenders or savers and express your personal feelings about money.
The couple should identify a standard of living and what they'd consider deprivation vs. luxury. Set priorities regarding owning a home vs. renting, buying cars and clothes, eating out and even having children. It often makes sense to bring a financial planner into the discussion and to write up a formal financial plan that will serve as a guideline. Go over all bills and be aware of when they are due, setting up a payment and record-keeping system. Each partner should be aware of all bills and take turns paying them.
"Determine the mechanism for handling money, such as whether each individual will have an account or whether there will be a joint account," advised Norman Boone, certified financial planner with Boone & Associates in San Francisco. "Either system can work so long as both members agree with it and are willing to follow it."
In terms of taxes, the sooner you know you're going to get married, the sooner you should adjust your withholding because you're going to pay more taxes as a married couple than you would pay separately.
"A lot of people entering a marriage will want to hide debt or credit from their spouse, particularly if they made mistakes in the past, so it's important that the other person be understanding rather than critical," said Flora Williams, associate professor in consumer sciences at Purdue University in West LaFayette, Ind.
Too often, secrecy about money carries through in the marriage for many years. Secret accounts unknown to the other partner are rather common, say the experts."It is not a good idea to have secret accounts because the spouse will always find out about them sooner or later when you do your tax returns," said Linda Lubitz, certified financial planner with the firm of Woolf & Lubitz in Miami, who has found from experience that women are more likely than men to put aside such funds, usually for extra financial security.
"When you're getting ready to marry, make a point to obtain disability insurance, write a will, make a decision on whether to rent or buy a home and also set aside three to four months' worth of salary in emergency funds," suggested Chantee Lewis, professor of finance at Bryant College in Smithfield, R.I.
Some experts suggest an ambitious goal of putting aside 10 percent of earnings in a savings account each month. Also use 401 retirement plans and individual retirement accounts for long-term investing, since both partners' lifelong futures are important.
When one partner or both partners bring substantial sums of money into the marriage, a prenuptial agreement assigning whose money will be whose in case of divorce is often used. That, of course, is a legal issue and one for another column.
"The prenuptial does get everyone thinking about the hard issues and forces you to declare assets and formulate a business plan," concluded Lewis. "The downside is that it takes the romance out of marriage and can often lead to quarreling that adds to the stress on the couple and the marriage."