Thursday, June 28, 2007

Newlywed Budgeting

Most of the financial problems I hear or read about in marriages have to do with miscommunication or just lack of cooperation between a couple. Typically one spouse handles all the finances and/or wants to relieve themselves of debt, build a budget, etc and the other just isn't interested. I heard a Dave Ramsey caller the other night who complained that despite being neck deep in debt, her husband refused to even talk about it. He just sat on the couch and watched TV because he had been working all day. Ouch.

In that spirit, here's a nice little article from MSNBC "How newlyweds can find financial bliss". Between my wife and I, our families certainly had different ways of handling finances. For one, my parents were fairly open to me about their finances, while my wife was kept in the dark on just about everything. Sadly I have learned more from their mistakes than their successes!

But one thing that was important to me was that we communicated regularly about our money. Isn't money the #1 cause of divorce?

Develop A Payment System That Works For You...Instead some couples find letting the more ‘enthusiastic’ partner handle the routine financial chores while keeping the other informed, is more efficient.

I think appointing one person in charge of just about all the finances is the way to go. Splitting it up can get confusing real fast. At the same time, I try to keep my wife informed about everything, even the little details. We've come up with some pretty good strategies for keeping each other in the loop, and many times I've had to draw out flow charts to show her where our money is going. Printing a monthly report that she and I can read together has also proved invaluable.

Epperson is a proponent of diverting a household’s cash flow into streams of yours, mine and ours. She suggests designating roughly 90 percent of the total household income as ‘ours,’ allocating 60 percent of that to household expenses and 10 percent each to retirement plans...“But there are times when you want your own money,” she adds. By allocating the remaining portion of the household budget — five percent each — to fund ‘yours’ and ‘mine’ accounts

We fall short on this one. We have a joint spending account, but nothing separate. With some debt repayments going, relatively low savings, and our income still in its infancy, we haven't had much to spend beyond the regular bills/savings/etc.

Epperson suggests...exchanges of credit information

Before my wife and I got married we didn't check each others reports. We did right after we married, and now we check them every single year from, but I agree completely with doing it pre-wedding. I read on another blog about one man's wife finding out about his heaping piles of debt the night of their wedding! What a way to start a marriage!

Once married, it pays to review each partner’s employer benefits plan. Sometimes switching to family coverage under one plan can yield better coverage despite the added premium cost.

So far we haven't run into this situation because my job offers insurance and hers does not. But if it did, we would certainly look at them both. It gets pretty complicated though, with not only premiums to consider but also which offers better benefits. That isn't always as clear.

the "money talk" is not a one-time thing, but a continuing dialogue for couples committed to living happily ever after.

Absolutely! Communication, communication, and of course...compromise.

No comments: