For Richer, For Poorer

Jun 09, 2005 |Heather Koerner

Are you getting ready to tie the knot? How about preparing to share the purse strings?

Have you ever noticed that it’s the most difficult things in life that always sound the simplest?

Want to lose weight? Just eat less and exercise more.

Want to choose a career? Just pray about it and follow your passions.

Want a cooperative child? Just be consistent — or get the SuperNanny.

It’s the same with marriage and money. We’ve all heard the statistics. Half of all marriages end in divorce. The most commonly cited reason: Money.

So be sure, the marriage experts tell us, to talk it all out before you are married.

Sound advice, but it’s never that simple. For as much as we use money, we talk about it very little.

Can you imagine having a nice, romantic dinner when your fiancée whispers over the violins, “So, precious, what do you think of fixed rate mortgages versus adjustable?”

Even if we do have “the talk,” it can be difficult to know where to start or what specific topics to hit.

“So, I don’t think we should get ourselves into too much debt,” says he. “I agree,” says she.

“Great.”

“Great.”

He’s thinking they’ll save for seven years before buying a house. She’s thinking she should get rid of at least one of her four department store credit cards.

The truth is, as any married person can tell you, money permeates a marriage. You have to make innumerable decisions about it, and those decisions can help to make or break your relationship.

So, yes, it’s crucial to discuss finances before heading down the aisle. But, what do you talk about?

The most practical way to start is with “fessin’ up,” as Southern grandmas like to say. Basically, you take turns explaining where you are financially right now.

You each list your assets (savings accounts, cars, bonds from Aunt Ruth) and then your debts (student loans, car loans, credit card balances). My own list tended heavily toward the debt side, but no matter how short either list is, be specific. For example, is that car in your name or your parents? What will an $8,000 student loan translate into for monthly payments?

For an added twist, Suzanne Boas, with Consumer Credit Counseling Service of Atlanta, recommends you each order a copy of your credit report and compare them. The three major credit bureaus have created a central website where you can request annual credit reports. Free reports are available to some Americans now — depending on where you live — but will be free to everyone after September 1, 2005.

Once you know where you’re starting, you can see where you're going.

There are scores of helpful books and kits on just about any bookstore shelf. But you can start right now by discussing three general money categories: earning, spending and saving/investing.

Earning may sound like an easy category, but it’s got several potential sticky issues: wives working or not, what to do when kids come and who takes the lead as the provider.

The main topic here is: Who will be earning the money during your married life? So take turns answering that question and listening carefully to what your fiancée says.

My husband and I even played a little game of “When we’re married X years, I expect…”

For our first year, we both agreed we’d be working full-time. However, at five years, I foresaw the possibility of leaving the workplace to raise children. My husband, surrounded by double-income families his whole life, hadn’t given that possibility much thought. So we talked about it — a lot.

Next, spending.

With this category, it’s tempting to jump right into mock budgeting. Shall we eat out four times a month or five? How much for golf?

But Ron Blue, a noted Christian financial counselor, writes that couples need to understand one concept first: Unless you spend less than you earn, no amount of income will ever be enough.

We’re back to something that sounds simple. But, seeing how credit card debt rises every year, it’s obviously not.

So, are you both committed to spending less than you earn?

Many financial experts advise cutting up the credit cards (or even freezing them) as soon as you hit a month you can’t pay the balance. Do you agree?

If one, or both, of you is bringing credit card debt to the altar, do you have a plan to pay it off?

Several of my friends have gotten caught in the “once I have a real job, I won’t have to have debt” trap. They racked up credit card debt during school, or in their early career years, thinking that once they earned more, their debt would disappear.

But that almost never happens, warns Ron Blue. Instead, as incomes rise, so does spending.

“That’s why some people receive salary increases and soon find themselves even deeper in debt,” Blue writes.

You’ll also want to discuss how you will, if at all, use debt in your marriage. Will you finance cars, furniture and electronics or save for them? Will you pay off student loans early or use the full term?

Once you’ve made these general decisions, then it’s time for specifics.

Your top three budget categories will most likely be taxes, tithe and housing.

Uncle Sam will take care of collecting his share — straight from your paycheck. It’s tricky to estimate taxes if you haven’t starting working, but you can. First, estimate federal income tax add an additional 7.65% for Social Security and Medicare and then add your local state rate for state income tax.

Next, the tithe. Are you and your fiancée committed to giving God a tenth of your gross income? If not, what will you give?

Then, housing. Assuming you’re not already homeowners, Crown Ministries, a Christian financial ministry, has an excellent suggestion: “[T]here are so many big decisions and adjustments early in a couple’s life together that we encourage newlyweds to rent for the first year of their marriage.”

Admittedly, this can be a downer for some. I was practically chomping at the bit to paint walls and plant trees. However, housing can eat up more than a third of your budget. Better to take the time to save, plan and do it right.

Now, for everything else — autos, insurance, food, clothing, entertainment, loan payments … the numbers can get overwhelming. A great place to start is with Crown Ministries’ budget guide. The site prompts you to enter your income, taxes and tithe and it gives you suggested values for each budget category. (Remember if you’re planning to live on one income, use only that income for your budgeting purposes.)

You may not need such a detailed budget for your entire married life, but most financial counselors firmly recommend working through one as an engaged couple. Your numbers don’t have to be signed in blood, but they will be a great springboard for discussion. Maybe he’s comfortable with $100 a month in clothes, but is she? He wants to buy a boat right off, but is that her priority? Will you base your budget on one income or on both?

Finally, saving and investing. How much will you sock away each month for short-term goals like a house, furniture, vacations and emergencies? How will you invest for long-term goals like retirement? If you aren't informed on these issues, do some internet browsing or talk to a trusted elder or professional (whose commission doesn’t depend on making selling you something).

Of course, there are numerous other issues to go through — who will keep the books, how much insurance you need, making a will and many more. But, hopefully, by laying your cards on the table and agreeing on general priorities, you’ll have a productive start.

Above all, pray together. As James 1:5 says, if we lack wisdom, all we need to do is ask. Seeking God’s guidance on the financial front end is a lot easier than desperation on the back end.

We know half of all marriages fail, many due to money. But according to Bruce and Denise Gordon, speakers at FamilyLife Marriage Conferences, only one out of 1,250 marriages between couples that regularly pray together ends in divorce.

Sounds like great odds to me.

Copyright 2005 Heather Koerner. All rights reserved.

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