by Megan Franks
6 Steps to a Successful Money Talk with Your Spouse
For Richer, For Poorer
Staying Sweet on Your Spending Spouse
Many studies show that one of the largest areas of complaint and conflict in marriage is money management. When starting life together as a couple, it is crucial to avoid the several mistakes that can cause long-term grief and tension in a marriage.
Starting the marriage with debt. The fun and excitement of the newlywed days can suddenly come to a screeching halt when the couple realizes that they are starting off in "the red." Many couples are forced into fighting financial battles from day one because they didn't have enough foresight to plan ahead before they wed. Some people often have savings accounts, stocks, bonds or other investments that their parents started for them as children that can be utilized at this important time. For example, when my husband and I married, he had a $500 credit card bill, but no other debts. I had a small portion of stock that was purchased as a child, but it was just enough to pay off the debt and start our financial record off with a clean slate.
Buying new vehicles. It's so tempting because it seems like everyone else is driving a brand new car. However, the sad reality is that new vehicles are among one of the worst investments you could make. Zero-percent financing, extended warranties, and other enticements the dealers use to draw people in still don't change the fact that automobiles depreciate in value tremendously as soon as you drive them off the lot. Very few couples actually keep the vehicles from their early marriage for an extended period of time because circumstances can change quickly. What happens when a car seat won't fit in your sports car after the unexpected baby arrives two years later? Will you continue to drive the SUV when you get a new job that requires a long commute? If a new couple needs to buy a vehicle, it is best to buy a quality used car. If they need to sell the car in a few years, then chances are greater that they will get what they owe (or even make a profit) rather than take a loss. My husband and I have taken only one small loss on one automobile over the years, but we also made a profit on a car that we drove for an extended period.
Starting out with everything your parents own. It's easy to forget that it has taken most people a lifetime to acquire their belongings. When I first married, I found myself jealous of my parents' new home and matching furniture, but after all, they were making about three times the salary that we were at the time. We lived with hand-me-down furniture until we could purchase new, but I knew many others who simply furnished their house by buying brand new things on credit. It may look nice, but you may discover later that the furniture isn't practical once children arrive (or that it is easily destroyed), won't fit in your new apartment, and cost double the ticket price by the time it is paid off. Remember that it takes time to make a house a home. Make a list of things that you need or want in order of importance, then purchase them once you have saved enough money.
Using credit cards. The rule of thumb is to never put anything on a credit card that you can't pay back before finance charges incur. Emergencies do arise (like flat tires, a trip to the ER, etc.) and credit cards are sometimes the only way to pay in moments of crisis. The mistake that many make is using credit cards to buy the things they don't have the cash to pay for but feel like they "deserve it" anyway. Clothing, expensive restaurant dinners, and vacations are some of the things that young couples feel like they deserve even if their paychecks show otherwise. While newlyweds certainly should not live in self-denial, they should practice restraint. After all, there are less costly alternatives to these things (purchasing brand-name clothing at resale shops, eating at the expensive restaurant once a year, go camping instead of a cruise, etc.). The problem is that young couples can start out setting a pattern for debt by buying what they want, whenever they want it. This could prove fatal in the end when they find themselves in a situation where they can only afford to pay the interest charges on the credit card, and have harmed their credit rating.
The keys to having a healthy financial relationship as a newlywed is to plan ahead, use common sense, practice self-control and avoid these common mistakes. Prevention truly is the key to an uncomplicated financial future. If a couple can do these four things, then they will find peace of mind, especially looking back ten years later.
Megan Franks is a freelance writer, wife, mother of two, and expert in the art of living frugally. She currently resides in Oklahoma.
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