The fact of the matter is few couples actually take the time to talk about money before the fights begin. Many of you probably grew up in a home where money was a deep dark secret. Your parents never talked about it calmly in front of the kids, but instead fought about money issues behind closed doors -- where they thought (or hoped) you wouldn't hear the fights.
Sound familiar? Want to be sure that doesn't happen in your marriage? What's the secret? it's simple -- talk about money regularly. Open money communication from before the start of a marriage is the key and continued money meetings throughout the marriage keeps the door open. Here's the top 10 things you can do so you don't let money and debt destroy your marriage:
- Have a money talk before getting married. Sure you talk a lot, but do you really understand your partner's money philosophy? Like it or not, money tends to define us in society. Many people measure their self worth by their money and possessions. You need to understand how each of you feel about money and how important it is to your self-esteem. How each of you chooses to spend money is often based on emotional baggage from childhood. If money was tight growing up, you may watch every penny even if it is not necessary. If money flowed easily from your parents, you might spend too freely without thinking about the consequences of how to pay the bills. Understanding each other's money philosophy will give you the foundation you need to work through your money differences throughout your marriage.
- Discuss your dreams and goals. That's the fun part. Don't hesitate to plan big, but temper your plans with what you actually have on hand and make plans to save for the big things you want. Your dreams don't have to be met all in one year. Develop a five-, or even 10-year plan to get to where you want to go without building up huge credit card debt. Whatever your goals, talk about the role money will play in reaching these goals. Be sure you understand each others' goals and how you will meet them together. Remember, whatever plan you write is not caste in stone. Revisit it yearly and adjust it to match any new dreams and goals that may have surfaced in the previous year.
- Implement your plan. Figure out who will be responsible for what. First, be sure you know how you will handle everyday money matters. Know who will be responsible for paying the bills and managing joint accounts. Also, decide how you will plan your long- and short-term savings and investments and who will manage what aspects of these accounts. But don't forget to meet monthly to review your finances. It's important that both of you understand your financial situation in case one of you can't carry out his or her responsibilities for some reason.
- Joint or separate checking accounts. This is both an emotional and financial decision. First thing to do is check with your bank to find out the costs and benefits of pooling your resources. Frequently, you can save a lot of fees and get better interest rates by pooling your funds. But, if emotionally you feel more secure keeping things separate, decide what is best for each of you. Whatever you decide, be certain to determine an amount each of you can spend without consulting the other.
- Develop credit in each spouse's name. It is important to maintain separate credit cards. Both of you need to have a good and separate credit rating. This will give you more options if one of you gets into credit difficulties. But if you do get into difficulty, don't lie and hide it from your partner. That will destroy the marriage.
- Don't build debt to rush your goals. You may get to the point where your desire to fulfill your goals quickly surpasses the money you have coming into your household. Don't give in to that desire. Remember you could end up paying twice the price with all the interest you'll pay and end up giving up other long-term goals just to get something right away.
- Determine how you will make long term investment decisions. Talk about your investment styles and get to know each others' opinions toward risk taking. You can benefit from building a long term portfolio that melds both your styles. Often one partner will be very conservative and the other more willing to take risk. Try to find a happy medium that uses the best of both of your talents. If you can't agree, work with a financial adviser to help you find a good investing path.
- Revisit your goals frequently. Make sure you are on the same wavelength as life choices change. You may find that one goal is no longer important to your partner, but something else has become more important. You must continue to talk about your goals, as well as whether or not your plan to meet these goals is working or if a new plan is needed.
- Save for retirement separately. Be sure each of you has an employer-based retirement plan or an individual retirement plan (IRA). This is particularly important if one of you doesn't work outside the home. Too often only one spouse has a retirement plan which gets torn to shreds if the couple decides to divorce.
- Keep talking. Your plans for saving and spending should be reviewed at least yearly to be certain you still have the same goals and are both comfortable with your progress toward meeting this goals.
Lita Epstein has written more than 25 books including "The Complete Idiot's Guide to Improving Your Credit Score" and "The Complete Idiot's Guide to Personal Bankruptcy."