To Love, Honor and Invest…
By Janet Ellen Hill

If Jerry Springer were your only source of information, you’d believe that cheating spouses, bizarre personal habits and eccentric in-laws cause most marital problems. In fact, fighting over money is responsible for most marital squabbles – it just doesn’t make for great television ratings.

And no wonder. Most marriages start off by planning a wedding, with the focus on seating charts and flower arrangements versus discussing the vulgar subject of money. Besides, it’s a lot more romantic to talk about honeymoon plans than financial plans. That might be more pleasant but it can lead to serious problems. Unspoken and unresolved disagreements about money management can fester and put a tremendous strain on a marriage.

Here are some practical tips to help you and your spouse marry your financial lives and live happily ever after.

Talk About Money Issues Early On

Do yourself and your new financial partner-for-life a favor. Talk about money issues sooner rather than later. It’s the first step towards creating a new financial system that works for both of you. It’s as important that you understand your partner’s money beliefs and financial history as it is that they understand yours. While it’s not ‘speak now or forever hold your peace,’ communicating early on keeps you from later discovering something completely unexpected.

Since opposites attract, it’s not uncommon for a saver to fall in love with a spender. Or, for someone who buys savings bonds to hook up with someone who invests in Internet stocks. If you recognize and understand these differences early you’ll have set the stage for solid financial relationship.

Don’t keep secrets about debts or credit problems. Bad credit records or bankruptcies may affect your ability to finance a new house or car, how you hold title to property and the way you file taxes. Disclose any financial baggage you are bringing to the relationship before the wedding. Surprising your partner with a $30,000 credit card bill as a wedding present is a sure-fire way to destroy trust.

Set Financial Goals

Start building a shared vision of your financial future by agreeing on some common financial goals. Make a wish list of all the things you want to do with your money. Do you need to pay off student loans or credit card bills? Do you want to save for a new home? Do you want to travel?

Don’t be afraid to dream. If you’re hard-pressed for answers, just ask what you would do if you won the lottery? Would you set up your own charitable foundation or would you buy a yacht big enough to park your Rolls Royce on?

Next, agree on a priority for these goals, with the understanding that your goals and their priority are subject to change over time. Compromise is a key marriage skill, and finding common ground on your goals and priorities is a great way to start.

Decide How To Pay the Bills

The first practical challenge of your financial “merger” is choosing joint or separate checking accounts — or both. The act of paying household expenses from one account is the ultimate "what’s mine is yours" statement. Some couples have no problem plunging into the responsibility and liability of a shared checking account. Others believe they are retaining their independence by keeping their checking accounts and financial identities separate.

Many couples solve the bank account challenge by combining both approaches. As a matter of convenience and commitment, they use joint checking and savings for their primary accounts. And to preserve some financial freedom, they keep lesser amounts of money in separate accounts. This money can be spent as each person sees fit — no questions asked.

Decide Who Will Pay the Bills

If you choose to pay bills out of a joint checking account, one of you has to step up and take charge of the financial housekeeping.

If neither of you is eager to pay the bills and balance the accounts, find a way to share these responsibilities. You are much more likely to run out of cash, run up debts and damage your credit rating when your financial records are in chaos.

To avoid unpleasant surprises, agree that both of you will turn in your checking and ATM receipts each week and schedule time for updates on your finances. A little communication goes a long way towards keeping your financial partnership on track.

Create A Spending and Saving Plan

How do you make your financial goals happen? By following a plan - a spending and saving plan. Start by listing your assets and debts on a combined balance sheet. Working toward your goals is a lot easier when you know where you stand financially.

Next, track your spending for at least one month. You want to know where your money is going so you can take more control over your financial future. This is particularly important in the early years of a marriage, when cash flow tends to be tight. (If you use computer accounting software, such as Quicken or Microsoft Money, generating an expense category report is easy.)

A spending and saving plan will help you balance short-lived pleasures, such as eating out five nights a week, against longer-term goals, such as paying off debts, buying a home or saving for retirement.

Plan to Pay More Taxes

No one is happier about your new union than Uncle Sam. That’s because many married couples filing jointly end up paying more taxes than two single people with the exact same income. This marriage “tax penalty” has been the subject of hot debate in Washington for years. And while the current budget surplus makes it more likely that Congress may finally address this tax code snafu, don’t hold your breath.

To find out if the marriage tax penalty will affect you, ask your accountant or financial professional to run the numbers, or use tax software to do it yourself. If you’ll be paying higher taxes next April, ask your employers for a new W-4 form. By reducing the number of exemptions you both claim, you can avoid getting caught short next April by increasing the amount withheld from your paycheck.

Here’s another tip for dual income couples: For tax purposes, the IRS considers you married for the entire year, regardless of the date you are actually married. For example, if you are married on December 31, 2000, you’ll pay any marriage tax penalty starting with your 2000 tax return. You can dodge this costly timing error by moving your nuptials to January 1, 2001. What a difference a day makes!

Resolving Problems

Finally, accept the fact that you and your new spouse are likely to clash over money issues from time to time. The key is to work through your disagreements, instead of sweeping them under the rug.

Start by talking about your financial upbringing. Many times, our beliefs about spending, saving and borrowing are linked to the way our parents handled money. Understanding where your partner’s beliefs come from will help you resolve your differences.

Stay focused on the issue at hand. Don’t let your argument drag up incidents from the past or deteriorate into personal attacks. Stick to the facts by keeping all paperwork and numbers in front of you during the discussion.

Find the middle ground. Remind yourselves that you both share the same financial goals and that a different opinion isn’t wrong, it’s just different.

If you and your spouse cannot resolve your money problems, you may want to get some help. Often, fights about money aren’t about dollars and cents, but the things that money represents, such as control, security, freedom and power. In these cases, talking to a qualified counselor may do more to restore marital bliss than new accounting software ever could.

Getting married is a lot easier than staying married. The same is true when it comes to merging your personal finances. It takes work to keep things running smoothly. The good news is that many of the most common marital money problems can be avoided with good communication and the shared belief that you only want the best for each other. It’s not always easy to talk about money with your spouse. But it beats throwing chairs at each other on Jerry Springer.

Janet Hill is a financial consultant practicing in Salt Lake City, Utah. She offers investment and wealth management services as a Registered Representative of Commonwealth Financial Network - a member firm of the NASD/SIPC. She can be reached at janetellen@meridianmagazine.com

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