The financial pros and cons of saying, ‘I do’
Most bankers think two people looking to get married would have lots of dinnertable conversations about combining their finances. That’s because they’re bankers, and bankers talk finance all the time. Statistics, however, show they would be wrong.
That’s despite a 2014 Money Magazine survey listing money as the No. 1 friction causer – over sex, chores, quality time, snoring and in-laws. The survey found money is one of the topics couples almost always avoid until it’s a problem.
Some people even think it’s unromantic to discuss money matters before tying the knot.
But it doesn’t have to be. And if you can’t seem to agree on how you will handle finances, consider pre-financial counseling with a professional specifically trained in this area. Your local banker would be more than happy to help.
It all starts with honesty. If a woman can tell her fiancé his furniture looks like it came out of a frat house, then she should also be willing to share her thoughts on spending habits and outstanding debts. Being open about your financial lifestyle helps avoid arguments about the incredibly high price of a closet full of shoes or the retaliation of buying a new side-by-side for the deer camp.
Just as it’s probably time to sacrifice his old college furniture, it’s also time to open the dialogue on money and burn that beer-stained, video game-worn sofa in a financial bonfire. Here’s a practical list of nine fire-starters to help your eternal flame burn brighter:
Start the conversation. Make it a point to initiate a conversation about your financial future at a quiet happy hour spot or over dinner. You may have asked him about a past relationship and what baggage he’s bringing to the relationship, so be upfront about how much that designer bag you’re carrying cost you.
Pull your credit reports. Know where you’re starting from and make a goal of where you’re going. A 760 or higher credit score will put you in the best credit categories in most places. Keep in mind one late payment can drop a FICO score up to 100 points depending on your score and history.
PRO TIP: AnnualCreditReport.com was set up by federal law to pull all three bureaus once a year at no fee. You can pay to obtain your credit score there, but many credit card companies provide your credit score for free.
Decide who pays the bills. It’s easiest to have one person in charge of all the household bills.
It’s just “stuff.” You have two couches that don’t match now? Sell them (and buy a new one from a locally-owned store).
PRO TIP: Mainspree, created at CoHab in Shreveport, can help you cash in on social sites. Other suggestions include Chairish, Etsy, FleaPop and Craigslist.
Adopt a team mentality. When it comes to big financial decisions, you both will have less stress if you take it on as a challenge together rather than a burden you deal with on your own.
Budget. Plan ahead and stick to it. Whether you create a simple Excel spreadsheet or use a website or app, putting all your information in one place will help you be better organized and purposeful in your spending.
PRO TIP: Mint and Level Money are favorite apps, but many banks and credit unions now have online budgeting tools imbedded into their websites as well.
Refinance your debts together to lower your interest rates and payments. It’s time to tie the knot on your debt. Unsecured loan rates are at all-time lows. Ask your financial institution what options it has and find the best products around before applying. You don’t want too many credit pulls lowering that credit score you just cleaned up.
PRO TIP: The 7K YourWay Loan from MidSouth Bank is a great option with competitive rates and no collateral requirements. Watch out for banks that want to transfer you to an introductory offer on a new credit card instead of a standard loan.
Separate (but known) checking accounts are OK. You can use a joint account for all the bills, but a separate account means you can buy the occasional present for your wife to remind her that you really appreciate her. Wouldn’t you much rather hear an excited, “You shouldn’t have!” than, “You spent how much!?” when she checks the account the next day?
Meet with a qualified financial adviser to discuss the future. Kids, retirement, unexpected life events. Plan for it all. Financial tools such as life insurance, education and health savings accounts, and annuities are just some of the options. Ask around and meet a trusted resource to help set your goals for the future.
This column is provided by MidSouth Bank. For more information or assistance with money matters, contact Chelsea Grissom at MidSouth Bank’s Greenwood Banking Center, 8360 W. 70th St., 938-3510.
