Practical Money Skills for Life: Marriage is Also Financial Partnership
Practical Money Skills for Life
Marriage is Also Financial Partnership
by Jason Alderman
Nothing erases the glow of a honeymoon faster than money woes. In their haste to live happily ever after, many couples don't do their homework before the ceremony and then are unpleasantly surprised to learn they're starting out their next life chapter deeply in debt - or married to a spouse who has very different financial priorities.
Here are a few tips to ensure you'll be able to say "I do" with no regrets instead of "I wish I hadn't," down the road:
Before taking the plunge, hold a frank discussion with your spouse-to-be about the state of your finances. You need to know whether one or both of you have student loan debt, high credit card balances, unwieldy car payments or other financial burdens.
On a more optimistic note, also tell your partner about any significant savings, investments or other assets you own, since that can impact where and when you can afford to buy a house, start a family and even retire.
Because each of you carries your own credit history and lenders often base credit decisions and loan rates on the spouse whose credit score is lower, share each other's credit reports so there'll be no surprises. You can each order one free credit report per year from each of the three major credit bureaus - Equifax, Experian and TransUnion - at www.annualcreditreport.com.
Marriage involves teamwork, so use what you learn as an opportunity to fix your scores together. If you're not sure where to start, consult a professional financial planner. If you don't know one, www.plannersearch.org is a good place to start your search. (Note to parents and friends: A session with a financial planner might make a good wedding gift. How many gravy boats does a young couple really need?)
Knowing where you stand financially may influence your plans for the wedding itself. If you've got $20,000 in outstanding student loans, do you really want to double your debt with an expensive wedding?
A recent survey of Visa Inc. cardholders found that 87 percent of those who had gotten married in the last 10 years said they'd overspent on their wedding or honeymoon. Leading offenders were food, cake and drinks (18 percent), the wedding reception (12 percent) and the honeymoon (11 percent).
There's a whole cottage industry today built on cutting wedding costs. A few helpful tips include:
* Print your own wedding invitations from your computer - www.mountaincow.com and other sites sell invitation software and high-grade stationery.
* Limit the number of invitation enclosures to lower postage - and save trees.
* Create a website for tracking RSVPs, posting directions, bridal registry links, etc.
* Order flowers and foods that are in season and consider holding a buffet or a dessert reception versus a sit-down meal.
* Limit the number of guests to ensure meaningful interactions with each. Remember, spending just one minute apiece with 300 guests would take five hours.
The most important advice is to create a wedding budget and stick to it. You can find good wedding budget tools at www.weddings.about.com/library/blbudgetworksheet.htm and www.weddingdetails.com.
Another good resource is Visa's free personal financial management site, Practical Money Skills for Life, whose wedding site features budgeting calculators, tips on necessary legal document changes, tax and credit implications, debt management and more (www.practicalmoneyskills.com/marriage).
Starting off your marriage as financial partners will give you a leg up on the other challenges - and rewards - you'll face together.
Jason Alderman directs Visa USA's financial education programs. To sign up for a free monthly personal finance e-Newsletter, go to www.practicalmoneyskills.com/newsletter.