Resolving finances before marriage

Personal financial topics are often the most difficult for people to discuss. But since financial issues often cause significant problems in marriages, you should try to reach agreement on your finances before your wedding. A helpful article by Roger Wohlner at ManagingMoney.com identifies some items to consider.

• Where do you want to be in five or 10 years?: Dreams for the future often come with price tags. Planning now will allow you to set priorities and start saving for those goals.
• What assets and liabilities are each of you bringing to the marriage?: Preparing a combined net worth statement will give you a starting point for determining how you can help achieve your financial goals.
• How will you handle spending decisions?: The process of defining goals and setting a budget can help resolve differing views about money matters, forcing couples to compromise and make joint decisions about how money will be spent. While that might seem like a painful process, addressing these issues now can help prevent future misunderstandings.

Read Roger's article in full here.

A financial plan you both can live with

When you were just starting out, whatever you earned was all yours. But now there are two of you, and things are a little different. Because, let's face it, you're in this together, and what used to be 'yours' is now 'ours'. US bankers Charles Schwab provide some guidance on how handle the transition to marriage.

Among the bank's financial tips for married couples are:

• DON'T BE AFRAID TO TALK ABOUT MONEY: Even the most compatible couples can have very different opinions about spending and saving. So it's essential to have that conversation and make sure you understand each other before the credit card bills come due.
• DECIDE WHETHER OR NOT TO MERGE YOUR MONEY: Every couple is different. Some will pool all their resources. Others will create a joint account for shared expenses and retain individual accounts for personal ones. Then, of course, there's the issue of taxes.
• CREATE A FINANCIAL PLAN YOU CAN BOTH LIVE WITH: When you talk about money, you'll want to discuss your financial goals. And if one of you likes to spend while the other prefers to save, find a fair compromise that'll make both of you happy. You'll thank each other later.

Read the Charles Schwab article in full here.

Other interesting articles from the same bank include On the Road to Financial Bliss and Talk Finances Before You Tie the Knot.

Tara's 7 tips for money and marriage

"If you ask married people why their marriage works, they are probably not going to say it’s because they found their financial soul mate. But if they are lucky, they have." So writes Tara Siegel Bernard in a New York Times article The Key to Wedded Bliss.

Recognising that not everyone is married to a financial twin, Tara offers readers a number of guidelines that will help couples become more compatible, and ultimately more prosperous, when it comes to money.

Here are just some of Tara's tips for couples:

• TALK AND SHARE GOALS: Before walking down the aisle, couples should have a talk about their financial health and goals. They should ask each other tough questions: Do we want children? When? Who will care for them? Will they go to public or private school? What kind of life do we want? When will we retire?
• BE SUPPORTIVE OF CAREERS: Having a supportive partner helps you professionally, which should trickle down to your mutual bottom line.
• RUN A HOME LIKE A BUSINESS: Make a budget and keep track of earnings, expenses and debts. And structure your business as a partnership; when it comes to making big financial decisions and setting goals, do it together.
• INVEST IN YOUR MARRIAGE: Spend it — time and money — together. Invest in the heart and soul of the relationship.

An excellent article. Read it in full.