Start Talking Now!
Communication is the only way to make sure money doesn't turn into a marriage buster, so now's the time to grab your partner and lay all your cards on the table. For some people, this isn't easy, especially if money was never discussed in their home growing up. Be sensitive and patient, but try to get the dialogue going as soon as possible. "A lot of couples don't talk about money until they get married," says Beth Kobliner, a financial expert and author of
Get A Financial Life: Personal Finance in Your Twenties and Thirties. "If you haven't had a conversation about debt and student loans, be prepared to be surprised."
Confess Your Sins
Time to come clean. Pull out your bank and credit card statements, checkbooks, information on all your assets and debts, any benefit packages you may have from an employer -- basically everything and anything related to your current and future cash flow. A critical factor, but oft overlooked, is your credit rating. Kobliner suggests that each of you order your personal credit report and compare notes. In fact, she recommends that you get three copies of both, one from each of the top three credit report companies, to cross-check information. Reports can be ordered from
Experian at (888) 397-3742,
Equifax at (800) 685-1111, or
TransUnion at (800) 888-4213, or visit annualcreditreport.com for a freebie (available once a year). Review them carefully, check for mistakes, and notify a company of errors as soon as possible.
Survey the Damage
With papers covering every square inch of your living room floor, you're ready to get down to the nitty-gritty: How much do you owe? How much do you make? What are your pension funds, stocks, life insurance, or real-estate holdings worth? What are your monthly expenses? What do you pay for health and disability insurance? Once you're married, you may want to choose one to cover you both. After all is said and done, what's left at the end of the month?
Set Priorities and Goals
Finally, the fun part -- sharing your dreams for the future. Do you fantasize about traveling the world, going back to school, building a home, buying a car, having babies? When? No matter how little your stash, it's important to decide together how it should be spent or invested. And don't forget that goals cover serious issues too, such as contributing toward a parent's health care. Knowing that you share similar goals gives you incentive to make the sacrifices necessary to reach them. You may also discover that your goals differ wildly. Apply a little creativity and a lot of compromise to prioritize goals as a team, or figure out a way to nurture individual -- and dueling -- dreams at the same time.
Decide on a Plan of Action
Now it's time to devise a realistic and specific plan that takes your current financial statuses and goals into account. Three options: Keep separate bank accounts and split up the bills; marry your funds in joint accounts; or open a joint-household account for bills but maintain separate accounts for personal spending. The last method allows each of you to retain some spending freedom and still cover your shared monthly expenses. Last but not least, decide who's responsible for paying the bills, consolidating statements, keeping tabs on your savings, and so on. Assign duties based on each person's strengths.
Check your progress every month and adjust your course accordingly. At the end of a good month, be sure to reward yourselves with a little treat -- like a lotto ticket.
by Andrea Dawn
7/1/08
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