Wedding planning is more than choosing the venue, the colors and
the cake.
You also need to plan the successful marriage of two sets of
finances and a prosperous life together. Which means it's vital to
make a few savvy money moves as "yours" and "mine" becomes
"ours."
Whether you're getting married in a few weeks or a few months,
here are seven smart moves to consider before you walk down
that aisle:
No. 1: Ask yourself three questions.
Money is the source of much marital discord, especially for new
couples, says Terri Orbuch, marriage and family therapist, research
professor at the University of Michigan and author of "5 Simple
Steps to Take Your Marriage from Good to Great."
Often those money fights aren't really about money, she says.
Instead, they are about security, control, self-esteem, love --
whatever money represents to each party.
"Couples need to look beyond the surface about money," she says.
"Money is a tangible thing so it's easy to project those emotional
issues onto money."
To get to the root of your money issues, Orbuch recommends a
solo time-out to ask yourself three questions:
- How did your parents deal with money growing up?
- What did money mean to you (and your parents) when you were
growing up?
- How have you dealt with money in previous relationships?
The first goal: "Really have an understanding of how you
approach money," she says. Then come together and share your
answers and "ah-ha!" moments, Orbuch says. "Be open-minded and ask
questions."
No. 2: Make money a regular topic.
Want to take the sting out of talking money? Talk about it
often, and have some fun with it, says Orbuch.
If you're not married or not sharing a household, the subject
might be new, she says. So make it light and fun. Some sample
topics she recommends:
- What kind of vacations do you think we're going to take in
the future?How many days? All-inclusive or a la carte?
Extravagant or budget-minded?
- If you won a significant amount of money tomorrow, how would
you spend it?
It gives you a chance to dream and plan together, along with a
window into what you and your spouse-to-be value and want from your
financial lives, Orbuch says.
As you get more comfortable talking money, you can discuss how
you want to manage it day-to-day in your new household, says Sue
Hallowell, a couples therapist and co-author of "Married to
Distraction."
"Joint accounts, separate accounts, joint credit cards, separate
credit cards -- really talk about the mechanics of how that's going
to work," she says. "I think if people really do some of their
homework around that, they will have many fewer issues as they get
married."
No. 3: Set ground rules that work for both of
you.
One dirty, little secret of marriage: Neither one of you is
"right" or "wrong" in your approach to money, says Hallowell. So
stop trying to "fix" your partner and instead set ground rules that
give both of you financial peace of mind, she says.
"One of the greatest fallacies in marriage" is that you will
change the other person or the way he or she handles money, she
says. "You can't."But you can put strategies into place that give
you both the comfort you need.
That could mean setting a joint spending threshold above which
buying decisions have to be discussed. Or paying bills and setting
aside savings for that lux vacation or new home first, then both
having a free hand to spend what's left.
"It's about understanding and making strategies that work for
both of you," says Hallowell. "That's why it's so important to do
it before problems arise.
Another smart strategy: In addition to the chats you have in
daily life, schedule time to talk about finances and goals at least
every three months, says Orbuch. Big-picture talks outside the
sniping over current obligations can let you calmly discuss
concerns andplan long-term, she says.
No. 4: Turn on the lights.
Chances are you know about your intended's romantic past. But
how about their financial past?
If not, then you definitely want to initiate that discussion,
Hallowell says. You need to be able to say, "we're going to be a
couple now, and we're going to be joined. It's important that we
know what each person brings to the marriage," she says.
"It's true for the emotional baggage we bring into the marriage,
and it's true for the financial baggage we bring into the
marriage," says Hallowell.
If you know that one of you has a pile of debt or bad credit,
"you can plan," she says. "Not knowing all the facts makes it
harder to develop strategies to move forward."
As part of your ongoing talks, review your credit histories and
credit scores together, says Jill Gianola, a Columbus, Ohio,
financial planner and author of "The Young Couple's Guide to
Growing Rich Together."
"Especially if you are going to consider buying a home together
or making a big purchase together," she says. "Not to say you can't
accomplish that goal if one of you falls short. But you may have to
reshuffle. It's important to know what you're marrying."
Also on the list: income, savings and debts.
Hiding a big, ugly money monster in the closet?
Come clean well before you marry, Orbuch advises. "Money secrets
are dangerous," she says. They "eat away at the trust in a
relationship."
Pick a relaxed time and a place when there are "no
distractions," says Orbuch. Not when your loved one's favorite show
is on or when you're both exhausted. Also, no computers, phones or
texting.
"The situation really makes a difference in how people hear any
information," she says.
No. 5: Get a pre-nup.
"There are just three things to do: pre-nup, pre-nup, pre-nup,"
says Raoul Felder, attorney and author of "The Good Divorce."
"That's the smartest thing you can do."
And yes, bringing it up "is very tough," he says. Two points to
make it easier: do it well in advance of the wedding, and place the
blame elsewhere. Something along the lines of "I went in to do my
will, and I have to have a pre-nuptial agreement," says Felder. Or:
my father's going to leave me some money and wants me to have a
pre-nuptial agreement, he says.
"Lay it off on someone else," says Felder.
What a pre-nup does: Except for issues involving children,
custody and child support, a pre-nup lays out exactly how your
assets will be allocated in a split. "It prevents ugly fights over
money -- whether it's support or division of assets," he says. "It
protects you against all of that stuff.
"One option to consider: an escalating arrangement that
increases your spouse's share in those assets the longer the
marriage lasts, he says.
Whatever provisions you make, you have to be honest going in
about what you really have, says Felder. "You have to submit
estimates of your monies that are accurate."
No matter who initiates it, with a prenuptial agreement, "you
each need to have your own attorney," says Gianola.
And if you're getting one, take care of it well in advance of
the ceremony, preferably before you send out the invitations, she
says. "Before you book the venue or the caterer, I think I would
get this straightened out."
No. 6: Don't consolidate debts.
Joining your lives is thrilling.
But joining your debts is unnecessary, says Gianola.
If one party comes into the marriage with debts (like a credit
card balance or a pile of student loans), "don't just put the other
person's name on that," she says.
That means don't transfer balances onto the nondebtor's cards or
even to a joint card, she says. While you can certainly help each
other pay off your individual obligations, there's no good reason
to put both names on them, she says.
But there's a good reason not to: it can hurt the nondebtor's
credit.
By keeping pre-existing debts separate, you protect the
nondebtor's credit, says Gianola. And that can be a smart strategy
if you both decide to use that good credit later for a home or car,
she says.
One all-too-common error for young couples: putting each other's
names on their student loan debts, she says. Big mistake.
Instead of a wildly romantic gesture, what you've really done is
declare that, even in the event of a divorce or your own untimely
demise, your intended gets to carry your school bills around until
they are paid in full, says Gianola. And student loans are one of
the few obligations that can't be erased in bankruptcy.
No. 7: Consider professional help.
How do you know when your relationship needs professional
(financial) help?
"If there's a sense that either party is either reluctant or
doesn't know how to go about pulling their information together,
says Gianola. "I think a third-party can sometimes grease the skids
a little bit."
Sometimes parents or relatives will also gift an engaged or
newlywed couple with a financial planning session. The price tag:
often in the $400 to $800 range for a two-to-three hour session,
she says.
A good planner can help you devise a bill-paying or money
management system that works for you both and also help you answer
questions such as "how much house can we afford?" says Gianola.
If, despite multiple, nonjudgmental attempts to share financial
information, plus a meeting (or the suggestion of a meeting with a
pro), your intended is evasive or stone-walls that could be a red
flag, says Orbuch. "There may be a deeper or more serious
issue."