Thursday, November 13, 2008

Financial Planning for Young Couples

At this time of year, many young couples are busy planning for spring weddings. Their thoughts are focused on menus, dresses, honeymoons and all of the many things that go along with a wedding. Unfortunately, conversations between couples rarely hit on one of the most important issues they will encounter in their new life together – money management. Many marital conflicts revolve around spending, saving and making money.
Decisions such as opening credit card accounts, having joint or individual banking accounts, deciding on large purchases, purchasing insurance and who will manage the money are among the many things that need to be discussed. Because of the potential conflict involved with money management, it is important that couples communicate openly on the subject. We usually come to a relationship with our expectations based on past experiences and what we observed in our own family situations. Obviously our vision and our partner’s vision of money management can differ greatly. Through open, honest communication, couples can share their feelings and talk about what is important to them - whether that is a house, exotic vacations, additional education, etc. Couples also need to determine who will pay the bills and whether accounts will be shared. If you resent having to ask your partner for money, this feeling needs to be shared during this discussion.
One good starting point is to identify financial goals and how the couple might reach those aspirations. This discussion will lead to the development of a spending plan. The first step in making a spending plan is to write down how much income you have and what expenditures you expect. Both partners need to be involved in planning how income will be spent. Talk about ways to spend and stretch the budget. If there is not enough money for everything, then it will be necessary to generate more income or reduce some expenses to make the budget work. Many couple get themselves into financial “hot water” by filling the gaps in their spending plans by using credit cards.
Finally, couples need to take time to regularly evaluate their spending plan. Determine what is working and what is not. Try not to criticize or blame your partner, but instead focus on alternatives and how to make the spending plan work.
So as you finish your wedding plans, please take time to talk about the resources that will be used to support you after the big event. Be prepared to find differences in what each of you feels is important in financial management and continue to keep those lines of communication open.

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