She wrote: "My husband and I are heading into retirement and, like everyone, we wonder if we have planned to maintain a lifestyle we envision. We have saved money for our two daughters' (ages 25 and 30) weddings. They are both college graduates and in good jobs. As we head into the wedding-planning whirlwind, we hope they both have chosen wisely and have long and happy marriages. Nonetheless, staying married seems to be a challenge in today's world. What is the best advice you would give young married couples on combining finances?"
Even before you get to the logistics of how to handle money together, you need to talk some things out. As I've learned while counseling couples about their financial struggles, having good jobs and pay does not mean they will be good money managers.
Just like in other areas, money opposites often attract. This doesn't have to be a bad thing. But if couples don't address their financial differences and come up with a plan to deal with the disagreements that can arise from those differences, they will have trouble in their marriage. A recent retirement survey by Fidelity Investments found that of the couples who argue about money, 38 percent said they never resolve their financial quarrels.
Most arguments aren't about the lack of money. It's the unresolved issues that couples brought into their marriages. It's the unspoken expectations. Or expectations expressed but disregarded.
Couples will spend a year or more planning a wedding but not even an hour in counseling. I encourage couples to get premarital counseling that includes sessions focusing on finances. And I don't mean a class where you just exchange credit reports — which you should do — but sessions that dig deep into the financial views you both have.
Many churches or religious organizations offer premarital counseling classes. Check to see if your workplace health insurance covers family therapy. You can also find a therapist through the American Association for Marriage and Family Therapy, which has an online referral feature. Click on the link for "Therapist Locator."
If, during therapy, you become troubled about what you're discovering about each other, postpone or call off the wedding. Give yourself more time to work through your issues. Maybe you both need individual therapy.
Get the counseling before you make any financial commitments for your wedding. It may make it easier to cancel the wedding if you find you're not a financial fit for each other. Isn't it better over the long run to realize you shouldn't get married than to go ahead with the nuptials because you'll lose some money you put down for the reception?
When it comes to merging finances, I favor the one-size-fits-both approach. This means joint accounts. All your income belongs to both of you. All your debts should be considered joint even if they aren't legally. When you get married, I believe you become one financially.
If you do it right, merging your money makes you plan together, including for retirement. In the Fidelity survey, four in 10 couples said they disagree on the lifestyle they expect in retirement. Discuss the type of retirement you envision as a couple and then set about making it happen.
But to make that work, you have to talk and set up rules for how to handle your joint funds. I recommend that couples agree that for anything over a set dollar amount, say, $200, they both have to sign off on the expenditure. My husband and I call this our "two yeses and one no" rule. Meaning it takes two yeses to agree on a major purchase. If one of us says "no," the purchase is a no-go.
When it comes to who handles the joint accounts, elect the best money manager to be the family treasurer. If both are you are financially challenged, then pick the one who is less challenged to handle the books. However, just because you aren't handling the finances doesn't mean you can hang back and let your spouse do everything. You have to communicate about your finances and schedule regular budget meetings.
I think the greatest wedding gift you can give each other is to make sure the financial part of your relationship is healthy.
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