Thursday, January 24, 2013
Marriage and Money
When it comes time to find that special someone to share your life with, we all kind of know what we are looking for. Some people want someone fun and kind, who wants kids, and has similar religious and political views. Other people might be looking for someone who loves music, hates the mountains, but likes cooking and movies. It comes as no surprise that we want someone compatible, which is why millions of people have turned to dating sites so they can filter through to find someone who shares their interests and values. And while it is easy to get caught up on the trivial things like the necessity for blonde hair and a golden doodle puppy, how many people think about important factors like money when they are looking for a potential spouse?
There have been plenty of successful marriages between people of differing views on money, but it isn’t easy. In fact, money is the number one argument between married couples today. Whether it is about living beyond your means, or too much independent spending, there is no denying, good or bad, that money plays a big role in marriage.
I am not married nor do I plan to be anytime soon. But when I finally decide to tie the knot, I want to share the same financial practices and goals as my spouse. I want to save money every month, only eat out a certain amount a month, enroll in the company I work for’s 401k, and invest. But this is so much easier said than done because I can’t just change the habits I might have, or that my significant other might have, in an instant. Why is all this important? Why should couples have the same financial goals and practices? Why can’t we have the fancy cars and the big house right now if we can afford the monthly payment? Why why WHY?
In order to make this lifestyle change that affects not only you, but the future of the inhabitants of your home, you have to know why what you are doing is important:
You must save money from every paycheck.
It is important to save for emergency situations and for the future of your family. Experts say having 3-6 months of living expenses in an emergency fund is vital in case something were to happen to your job or your spouse’s job. This isn’t just for married couples – this is for everyone! Put aside money each month into your savings account. If you aren’t able to have it automatically in there when your check is deposited, check out online banking and move it each month on your own which is what I do. Saving money gives you stability and can help you with big purchases. If you are tired of living in an apartment and paying the rent of your landlord (In one year’s time, you will spend an average of $9000 if you are renting. Live in an apartment for five years, and you have put in $45,000 of money you can’t get back), start saving! Cut out extra expenses like eating out and stop impulse buying. Before you know it, you will have enough money for that down payment. When you have your house, it will be your own. The more payments you make, the more equity you will have in your home, whereas with an apartment, the more payments you make, the more you lose. If you are having trouble saving and/or are interested in down payment assistance, visit our website at www.newcenturyida.org.
You have to think about debt.
Whichever lucky person marries me will inherit $30,000 of debt! Yay! Debt is definitely something to talk about. You don’t want any surprises. You don’t want to find out after you are already married that the IRS has been garnishing your spouse’s wages and they haven’t filed taxes since 1990. Or that your spouse has thousands of dollars of credit card debt and collection agencies won’t stop calling. You have to be open and honest and make it your goal to pay off your debt. Don’t hide from it! It will be such a relief when it is paid off! Not only that, when you wait to buy something until you can afford it, you are doing you and your family a favor. Sure, it might be nice to drive around in a nice car and live in a huge house, but would you rather be strapped for cash with a fancy car or have a manageable car payment/a car paid in full that is average or above? I’ll take the latter.
When you get married, you become a partnership. You have to stop thinking in terms of “I,” and instead think in terms of “we.” What do we need? What do we want? How should we fix this situation? So if your spouse goes out and buys a $100 pair of shoes, but you don’t have enough money to put food on the table, there is a problem. If you are trying to save, that means that the rule you guys established about not buying Starbucks for a while applies to you, too! It is important to know where your money is going each month. I know some couples who have a certain amount of money each week, and when it is gone, it is gone (single people can do that, too; I haven’t managed to make it work yet, but I am working on it). Whatever works for you and your family.
Living paycheck to paycheck is stressful.
Not having any savings and depending on that check every two weeks to get by is so so stressful. Saving and budgeting is soo important if you want to feel happy about your money. It doesn’t mean you can’t have fun, but do so within your (agreed upon) financial limit. Also, you want to start thinking about your future. Do you still want to be working at 70 years old? If not, you and your spouse should look into joining your company’s 401k plan. If it doesn’t have one, talk to a trusted investor about saving for retirement.
I am no financial expert nor do I have any experience being married, but I do understand how important communication and being on the same page is when it comes to money and everything in between. This post is to raise awareness to talk about money before tying the not, and most certainly isn’t to discourage anyone from marrying the love of their life. So talk about it, read about it, and plan for your future!