Credit discussions are just as important as divvying up household chores
You might think new marriage survival is all about figuring out how to divide household chores, but marital money discussions are just as important as whose turn it is to do the dishes.As these couples and experts share, setting up some credit rules after the wedding is the best way to ensure that plastic doesn’t put a damper on your post-honeymoon bliss.
1. Get the conversation going.
Although it helps if you have a handle on your partner’s finances before walking down the aisle, once you decide to commingle money in marriage, it really makes sense to talk about credit guidelines, says Kathleen Burns Kingsbury, a wealth psychology expert and author of “How to Give Financial Advice to Couples.” “Especially in the beginning of a marriage, you’re both more open,” she says. If you’re already working with a financial adviser, you can easily add credit cards to your meeting agenda.
Otherwise, you should start your own dollar discussion. “It may sound boring and dull, but spend 15-20 minutes once a month to check in on spending, savings, credit cards and debt,” says Kingsbury. If you’re the spouse who is more money conscious, you can say something like: “I’ve heard about some couples getting into trouble when they’re not talking about money, so I want to make sure this part of the marriage is cared for.”
You can even try to make the task more fun, says Jeff Motske, author of “The Couple’s Guide to Financial Compatibility,” by planning a “Financial Date Night.” “Couples can discuss their short- and long-term goals with one another at a favorite restaurant over a nice bottle of wine,” he says.
2. Set limits that work for you.
Paul Moyer, owner of SavingFreak.com, and his wife Amy (who are both personal finance coaches in Anderson, South Carolina) started having financial meetings in the very first month of their marriage.
“That is also when we laid down some ground rules for spending. With credit cards, we started with no spending that was not in the budget, and when we did spend money, if it was over $20 we had to consult with the other person,” he says.
No matter what amount you decide on (author Motske and his wife go as high as $400), you can follow the same principle. “Working together is the only way to make our budget work each and every month,” he says. “In fact, we have never really had a fight over money in 10 years,” says Moyer.
Setting limits doesn’t necessarily have to revolve around a dollar amount, says Kingsbury. What works for her own marriage is that she and her husband have come to understand what the other person values. “My husband and I spend a fair amount on skiing. But we’ve consciously decided we are allowed to spend that money for those experiences,” she says. If your hobbies don’t mesh, that’s fine, too, as long as each person is allowed some judgment-free flexibility to enjoy his or her own thing.
In addition, take the time to understand your partner’s spending style. “It’s important to be respectful about your partner’s money personality. Someone can come into the marriage thinking credit is only for emergencies. Another might use credit for everything to earn points,” says Kingsbury. An honest conversation is more productive than finger-pointing, she adds.
3. Share statements.
In their three years of married life, Amanda and Chad Harmon of Provo, Utah, have moved “from ‘proving’ themselves to trusting each other,” says Amanda. Because her job is with a credit card security company, SecurityMetrics, she instinctively is on watch to protect her personal credit accounts from being hacked.
“When hackers test the authenticity of stolen credit cards, they often make small purchases at fast-food restaurants or gas stations. I want to make sure I catch any type of fraudulent activity,” she explains.
Her method is to save every single card receipt. “It was a pain at first and took a few months to get my husband on board, but now we save all our receipts in a little basket and have a mini finance meeting at the end of each month to reconcile the receipts with our credit card statements,” she says. That way, not only are they guarding against fraudulent purchases, but each knows what the other spends during the month.
Kingsbury says that the Harmons’ strategy is smart. “In my marriage, I’m the one who pays the bills, but when the bill comes in, my husband and I review it and have a conversation,” she says. Ideally, no matter who is in charge of sending payments, both members of the couple should look over the statements.
Motske and his wife take statement sharing a step further by using what he calls the “three-highlighter method” to identify any excessive spending that might be taking place, and ultimately avoid bitter arguments later. “Use three different colored highlighter pens to differentiate a) necessary expenditures; b) those that you really wanted; and c) frivolous ones,” he explains. Seeing your spending habits in living color helps both of you make better decisions moving forward, and achieve financial goals together.
4. Don’t downplay secret spending.
In our society, it has almost become a sitcom punchline that spouses go on spending sprees behind each other’s backs. Couples may even go as far as to practice financial infidelity by keeping secret bank accounts, as 13 million Americans do these days, according to a January 2016 CreditCards.com poll.
What may start out innocent enough — maybe a sale that you couldn’t pass up and then just “forgot” to mention — can quickly grow into a pattern of credit betrayal. “Secret spending breaks down one of the pillars of a relationship — trust,” says Motske. “A lack of trust here soon spills over into other areas of your relationship, which can ultimately erode the bond between you.”
5. Make future credit decisions as a team.
Another rule to have once you’re married should be regarding new credit accounts. Because lines of credit can be opened as an individual, it can be tempting to go ahead and do so any time a retail store asks if you want to apply for a card, but that approach can be dangerous.
“As a rule, we do not take out new credit,” says Moyer. “The only time we even consider new credit is if we are making a large purchase (appliances, furniture, etc.), and the store offers us a reasonable percentage off to get a credit card with them,” he says. In those cases, the Moyers make sure they have the cash on hand to pay off the new card immediately.
Having a similar guideline in place for your marriage can help prevent debt from getting out of control.
6. Nip problems in the bud — together.
Not every marriage starts off debt-free, and credit card balances can creep up, but how you handle such situations can set the tone for your marriage. “Be compassionate if your partner has credit card debt. Chances are they didn’t intend to get in over their head financially,” says Kingsbury. Ask questions to find out how it happened, and make a plan to pay off the credit cards as a team, she suggests. If you feel you need assistance to deal with debt to meet your bigger financial goals as a couple, then get help. “Finding a skilled couple-friendly adviser can be an important step in a marriage,” says Kingsbury.