Bride, groom from different financial worlds need to talk, budget
Dear New Frugal You,
I read your article about the rich bride and poor groom and how they should discuss their money expectations, and I'm sort of in the same boat (in my case, it's rich groom, poor bride). You also mentioned we should create a post-marriage budget. I have a one-word question: How? -- Ms2Mrs
You ask a very good, succinct question. How does a couple create a workable budget, especially if they come from different financial backgrounds? You may spend more time choosing your reception menu, but creating a budget may be one of the most important things that you can do before your wedding to assure a successful life together.
The reason is simple. Although couples often argue about money, money is generally not the real issue. Money is the symptom, not the cause. Root causes may be different priorities or radically different financial viewpoints.
The key to doing a first-time budget is to recognize that it's more than a tool to control your spending. It's a great way to promote discussions and discover what you each feel about money and the things it can buy.
Jane Honeck, a CPA and author of "The Problem with Money? It's Not About the Money!," suggests that newlyweds "begin honest, frank talks about money. Like sex, money isn't easy to talk about, but if an engaged couple can't talk about it now, it won't get easier in the future.
"Because money is such a loaded topic, it's easy to get into an offensive or defensive position with where you are today. So start by talking about how money was handled and modeled by your family as you grew up. What do you remember most? What lessons, beliefs or values did you accept or reject from your parents or other influential people in your life? By starting with your story, you can defuse your personal opinion of what's right and wrong and start from a position of compassion and understanding for your partner and yourself.
"From that place, you can then talk about your current situation and begin modeling a plan together for your finances when you are married. Working on a financial plan now will give you an opportunity to work together as a team helping each other. It will be an experience you can draw upon during your married life together."
The trick is in processing the differences while they're not loaded with emotion. Every couple will bring different money habits and beliefs to the marriage. By openly discussing them in an objective manner before the ceremony, the couple is best able to create a workable plan for the future.
What happens if you don't make financial plans before the wedding? Honeck says, "Money is going to affect many, many parts of your life together -- that's a fact. So ignoring financial plans until after the wedding is setting you up for bigger problems later. When you've vowed to join your lives with all its ups and downs, and later discover a sticky, financial issue, one or both of you is going to feel betrayed. Now is the time to share your money strengths and weaknesses and take advantage of your new, fresh love to plan your financial future together. If you don't, eventually the everyday pull of financial ups and downs will wear the relationship down and getting on the same financial page will feel impossible."
The final step is in actually putting a spending plan together as a couple. Decide where to allocate your income. Do you emphasize housing? Transportation? Savings? Setting dollar amounts for each category is an excellent way of negotiating differences in a calm manner.
Begin with a sample budget. Bankrate.com has a household budgeting work sheet to start with. Use each entry as an opportunity to discuss what's important to you and your mate. Just a matter of filling out the blanks.
You will find areas of disagreement. But don't let difficulty prevent you from coming to an agreement now. Unsettled issues now will almost certainly grow into more serious problems later. Remember that the effort that you expend now will pay dividends for your entire marriage!
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