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Financial Advice for Couples Getting Married

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Michelle Singletary
Washington Post Personal Finance columnist
Tuesday, June 14, 2005; 12:00 PM

As part of our Wedding Week series, Washington Post Personal Finance columnist Michelle Singletary was online to offer advice to couples getting married.

Read Michelle's latest columns .

The transcript follows below.

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Michelle Singletary: Hey folks. Don't you love this wedding week? Lots of good, interesting and informative chats. Well, let's get started.

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N. Bethesda, Md.: As unromantic as it may seem, before anyone plans to marry and spend the rest of their lives with someone, couples must discuss money matters. In fact, even before the engagement, there should be mandatory pre-financial counseling with a professional specifically trained in this area.

Frank discussions should center on how each person handles his/her money and whether they are financially compatible with each other. Couples should exchange credit reports, know how much debt will be brought into the marriage and have discussions on how debt will be handled. Couples should also take a hard look at each others spending habits and their attitude about money. Also, as a part of the pre-martial financial counseling, couples should also discuss short and long-term financial goals and develop a plan to reach them. Most of us need help in this area,some may seek it, but most of us don't. My advice is to do it and do it in the beginning before the ring is bought. I strongly believe money has to be one of the top 3 reasons for divorce and arguments within the marriage which can be avoided if the couple is completely honest with him/herself about his/her relationship money and reveals it to the other person. I wish there are boxes to check off on the marriage license which ask, 1. Have you exchanged credit reports? and 2. Have you had pre-marital financial counseling?

Betty

Michelle Singletary: Betty my girl, you said it all and your commentary is a great way to start off this discussion. This is what I tell every couple that will listen to me.

Amen. Amen. Amen!

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Northern Virginia: How do you go about deciding joint and separate bank accounts. I know a lot of people have separate accounts, how does that work since its essentially "our money" and not "my money" or "your money?" Thanks.

Michelle Singletary: Lots of people have separate accounts because they don't believe in "our money." But me, I say put it all in one pot. Pay the bills together from that one pot and stop all the bickering about who should pay what or how much each should contribute based on what each makes. Selfish way to go into a marriage. In my opinion.

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Leesburg, Va.: My fiancee and I are thinking about whether we should do a pre-nup or not. We each own our separate condos and have just bought a town home together, and she has a large amount of student loans. Our understanding is in Virginia, whatever people have coming into a wedding is their individual property, not joint property, so I'm guessing we don't need to do an agreement.

Are there other facts or legal issues regarding pre-nups we should consider?

Michelle Singletary: Consider staying single -- since that's how you are approaching this marriage. Do you plan on having kids? If so do you plan on exposing those kids to each other? So if you want to share kids and not your money or assets what does that say about what you value the most?

A prenup in my opinion is a plan to fail. It's a battle plan and in battle there are never any winners no matter how well laid out the plan is before you decide to fight.

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Capital Hill, D.C.: How will my intended credit record effect me? I have a great history and don't have any real debt. My intended credit history is not that great and he owes money. When we marry how will this effect me?

Thanks.

Michelle Singletary: When you marry you don't inherit your spouse's credit history. But that bad or good history can affect how much you pay for credit in the future. For example, if you intended has bad or poor or below average credit (credit score of 620 or less) than if you two decide to buy a home that come mean paying more for a loan for that house. The same for any joint credit cards you might get or a car loan. But not to worry because your credit score is updated constantly and with the right moves your intended can improve his or her credit score. The biggest factor on obtaining a great credit score is paying your bills on time all the time.

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Washington, D.C.: Hi Michelle,

My fiance and I are 27, have lived together for about 2 yrs, recently bought a place together, and are getting married in October. We've always been pretty independent people, but for convenience's sake, how do we move from putting grocery receipts in a cup and splitting the bill at the end of the month like roommates to joint checking like a couple? Any suggestions on how to ease into it? The cup is starting to get on my nerves.

Michelle Singletary: Put the cup in the trash when you get married. Simple as that. Merge your money. The way to stop acting like roommates is to stop acting like roommates.

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Richmond, Va.: Here is a good question ... how much should I tip the minister for doing the wedding?

Michelle Singletary: Last time I checked ministers doing weddings expect to be paid not "tipped." The best way to know is to ask the minister or his assistant what is the usual amount he is paid. My guess would be around $150 to $200 but I'm not completely sure. So ask.

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Rockville, Md.: My Boyfriend and I have been living together for 4 years and are talking about marriage. I am worried about his financial situation. Will his previous debt become mine if we are to marry?

Michelle Singletary: See previous answer about pre-marital debt. But my question for you is if you're so worried about his financial situation why are you living together? Haven't you had the financial conversations already?

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Washington, D.C.: Is it less expensive to get married in your backyard rather than a church? Either way you could still have a pastor or priest unite the two of you.

Michelle Singletary: I think most of the expense comes from serving your guests food. "A church" wedding is where you hold the ceremony and usually doesn't cost much at all if you are a member of the church. But if you mean the reception and having it at a church hall, again the amount you pay depends on the number of people you invite whether it's in your backyard or a church hall. Of course with your backyard you don't have to pay to use the place.

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RE: Pre-nup: I'm shocked that you disagree with pre-nups. Every financial advisor will tell you, long before crunching the first number, that the first thing you should do is have your will, power of attorney, and other "being prepared" documents in order. A pre-nup is just that -- being prepared, just in case.

Michelle Singletary: Be shocked all you want. All those advisors are coming from a non-spiritual place. And by the way less than 10 percent of married folks have a pre-nup. It is not one of the "required" documents you get when you are married. It's a document people get when they don't trust the person they are marrying and in my book that means you shouldn't be marrying the person in the first place. Again, I go back to the example of the children. If you are getting a document to keep your money and assets away from your intended than why don't you get a pre-nup to keep your children away...aren't they the most precious thing you have?

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Washington, D.C.: What is your advice on being financially sound regarding the planning of a wedding? If I planned a wedding on a weekday to save money do you think people would really come? What is a reasonable expense for a wedding if I earn about $78,000 a year, and will have about $100,000 of school debt to pay off? Thanks.

Michelle Singletary: Child if I had $100,000 of student loan debt I wouldn't be spending hardly anything for a wedding. In my book you should pay CASH for a wedding. And by that I don't mean you can't charge anything but you had better be able to pay the bill off the next month or you can't "afford" the wedding. But if you are saving well for retirement, have your emergency money set aside, no credit card debt or massive car or student loan debt than spend what you like -- it's your money...as long as it really is YOUR MONEY and not OTHER PEOPLE'S MONEY as in credit card, momma and daddy dipping into their retirement fund or home equity, etc.

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Boston, Mass.: Michelle, I have a much smaller salary than my fiance, and I can anticipate her spending more on luxury items than I will. She of course earns this money, so will it be appropriate for me to tell her to keep her spending to a minimum?!?!?!

Michelle Singletary: It would be appropriate for the two of you to read the very first posting of this chat from Betty. You two should talk to a pre-marital counselor just to get everything on the table. I'll say it again (and again and again if I have to) when you get married it should be "our" money so what she or you make shouldn't matter. Your spending limits should reflect both of your financial goals. If all your financial ducks are covered (you've both agreed how much to save for your retirement, new home or home improvements, children (if any) emergency money--- then you can set each have an allowance that you can spend however you like -- no questions.

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Rockville, Md.: Following up on your response ...

We discuss our finances often, but we do see things differently when it comes to money. Is this a sign that our marriage would be doomed or is it ok to see things differently as long as the bills are paid?

Michelle Singletary: It's okay to see things differently if you both have a joint plan for your financial future. But you need to have what I call "house rules." Meaning you both decide how much to spend on fun stuff. You both decide how much you are going to save for retirement or whatever your priorities are. If you are not on one accord about your financial priorities and how you will spend, save and invest your money than yes you will have some major issues (and fights) when you get married.

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D.C.: What do you think about couples using 3 separate bank accounts? A shared account and one account for each person. The shared account would hold everything but an equal agreed upon amount that is specific to each person (basically an allowance). Once the money is in an individual account it can be used/saved however that person wants (and no fair for the other person to track it or ask to borrow or use it).

Michelle Singletary: I understand the concept and it's close to what I talk about when I say merge the money but the problem is people do keep track. Some do hoard the "separate" bank account money and then use that against the spouse that may just spend all of his or her "allowance" money. Just one joint savings and checking account is needed in my opinion. That way you both always know how much money is in the pot. Now my husband and I do have an allowance sort of speak but it's not a set amount. We just use what we need for our individual needs. When he needs money to play golf he takes it out of the joint account. When I need money for .... well I actually never spend money :) It's just not a big deal since the "our" money is really ours and none of it needs to be put in another pot.

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Washington, D.C.: My fiance's parents had what seems like an unnecessarily complex financial arrangement -- one joint checking account, one savings account and two separate checking accounts that they could use at their discretion. My fiance thinks we should do the same. I think we should just have one joint checking and one joint savings account. What do you usually recommend to newlyweds?

Michelle Singletary: I guess you know by now if you read the early posting. Show your finance the transcript of this chat because he is WRONG.

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Gaithersburg, Md.: I have been dating off and on since college a beautiful young lady that wants to take our relationship to the next level, marriage. I'm an accountant so I'm very good with money and the flow of money and where the money is coming from and she is not. She defaulted on her Federal Student loans a few years ago and finally about 2 years ago she paid the collection agency to have the Govt. pick up the loan again. Now she has missed 3 months of those payments as well and they will default her again, I try and bring it up to her and she continues to push it to another day, saying it's to stressful. Basically makes me feel like an ass for trying to help, or I'm interfering. I try and create some sense of reality when I say, "you think your stress level is high now remember when some company called out of the blue and forced your hand to pay?" Oh and the money she used to pay the loan was from a car accident, a fluke event saved her, what about tomorrow? I feel like I would go crazy if I was that non-interested in my personal finances. I was able to snag about 10K from her to invest before she could spend it but now we have to dip into that to correct her current situation. Is there a GOOD or non-patronizing way to get someone interested in there personal finances? I'm sure her credit is bad, but she will not find out, I worked for years on my credit to get it in the 700's and when/if we marry, puff their goes my effort. What do you think is their hope?

Michelle Singletary: I think you are right to be worried and you are asking the right questions. But you know this isn't about the money, right? Your girlfriend has some other issues going on that makes her ignore her financial situation. You need to get her to address those issues before taking it to another level otherwise if you do merge with her you will have married into her unresolved issues. Sorry for the pop psychology but it's true none the less. If you're stressed now about her being stressed about not handling her business imagine what it will be like when the calls are coming to your joint home?

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Washington, D.C.: My fiance and I are planning to get married next fall. He is working full-time and I am too but will soon leave my job to complete my graduate studies before we hop the broom. Paying for school and preparing for a wedding are both draining. Are there any financial areas we should especially pay attention to to make sure we stay on top of our financial game and don't fall behind. Tips or advice?

Michelle Singletary: Don't try to juggle too many financial balls. If you are going back to grad school and it's financial draining than watch what you spend for a wedding. Or make sure this is the right time to go back to school? Can you really afford to go back right now? Just be sure to crunch all the numbers and have a good budget.

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Alexandria, Va.: The wedding is in one month and the monetary gifts in excess of $1000 are already rolling in. My area is generous when it comes to weddings, whilst fiance's region are more the wrapped present people. I have 150 coming from my side, 50 from his. Those things aside, we're going to be getting lots of money ... and we're wondering what we should do with it after the wedding? Do we split it (if so -- 50/50?), open a joint account, buy some things off the registry we could use like flatware? Do I pay off some wedding expenses, a couple hundred that I'll have on a credit card? Or do I offer it all up to him for the honeymoon he's bought for us? He's spent so much on it, that it would certainly help him feel better....

Any organization of these priorities or thoughts about how we should go about this would be helpful.

Thanks, Jen!

Michelle Singletary: Okay Jen, read back what you wrote. There is a lot of "his" and "mine" going on in your questions. Doesn't matter what side the money is coming from. It's all money and it's all "YOURS" as in yours and his. Pay off the credit card debt cuz you shouldn't have that anyway. Put some of it toward the honeymoon if your man took on debt to pay for it. If there is any money left make sure you both have emergency money to start off your new life. If that's taken care of then yes have fun with the money and buy the things you might want for the house.

But most important now that you are getting married in a month start thinking of the two of you as one -- one family, one bank account -- one huge blessing that so many people think so much of you to give you cash.

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RE: Wedding at church/backyard: Most homeowners don't have enough tables, chairs, silver/tableware, linens, etc for a wedding reception and thus people often have to rent that stuff. And depending on how big the house is, a tent and port-a-potties as well. You'll have to consider parking. And possibly inviting neighbors out of neighborliness goodwill and/or using their parking areas! Which can add up to as much or more than some site facility fees. Definitely shop around and do your $$ homework before deciding.

Michelle Singletary: All good points. Thanks!

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Maryland: What would you advise regarding combining accounts for a 50-ish couple, each marrying for the second time? I am currently helping pay for college for my kids and he'll have his kids' college expenses in the near future, so we want that money to stay separate. Also, we want our kids to inherit from their own parent's assets. He owns the house where we'll live, and I recently sold mine. We are like-minded when it comes to spending levels.

Michelle Singletary: Stay single. Really. All this his and hers. Why are you getting married? Doesn't matter if you're getting married at 20 or 50 or 100 you should combine accounts. Now having said that I understand the need to make sure you pass on certain assets to your children from a previous relationship but that can be handled with a will.

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Mitchellville, Maryland: Michelle, I know you advocate combining your finances when you get married. But, I am 54 and my fiance is 56. I have substantial assets from my previous marriage that I would like my children to have. He has less assets than I do, and he also receives a pension, so it is too late to add me to that.

What do you advise in our circumstances?

Michelle Singletary: Seriously I do understand that when you are merging money later in life you tend to be scared. We all know that 50 percent of marriages end in divorce and the percentage is higher for people marrying for the second time. But if you take the time to get to know the person you will be sharing your life, bed, family and children with than there should be no need to keep your money separate from him or her. People really think about what you are asking because this is what you are saying "I want to marry this person and share my most precious things with him (my body, my children, my mama, daddy, cousins etc.) but I don't really want him or her to have access to my house, money, assets. If that is the case than why share at all -- anything. Just keep dating. But you ask these questions because you have fear in your heart. So until that fear is resolved should you really be getting married? I'm just asking.

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RE: Our money questions: Hey Michelle, I agree with you that when you get married you should merge finances. My problem is our parents. My parents are very bad with money; I give them between 6K and 10K a year in loans they never repay. My fiance parents are older; he will soon have to pay for a full time caregiver for them. If we merge our money what happens when my parents ask for another loan? Do I get a say in his parent's care plans? At some point it may be necessary for me to buy my parents home and have them rent it from me. If our money is merged he'd have to take on part of that expense. That doesn't seem fair to me.

Michelle Singletary: If you get married you BOTH have a say in what loans are made, what homes are bought and whether to get a full time caregiver for either sets of parents. I mean would you really do anything so major as make huge loans or buy a home without the agreement of YOUR spouse? I certainly hope not. The fate of your two sets of parents become a problem for both of you to solve or resolve.

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Arlington, Va.: So because you don't believe in pre-nups, you won't address Leesburg's question about facts/legal issues with pre-nups? Isn't this forum for information sharing regardless of what you personally believe? People will get pre-nups (including myself) regardless of your views so please answer the questions (if you know the answer).

Michelle Singletary: I know the answer but you can't make me give the answer. And this is a forum for information AND my opinions. That's why they pay me to be a COLUMNIST. Look if you want information on a pre-nup you got to talk to an attorney and you know that. My tip is don't get one. And if you NEED one you don't need to be getting married. But if you must be hardheaded be sure you both are represented by an attorney, that it's not signed under duress and that ALL assets, money etc. are disclosed otherwise it will and can be challenged. Happy now?

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Washington, D.C.: Michelle, I'm submitting early in the hopes of getting this posted. I'm getting married at the end of the summer, and my fiance and I are a bit overwhelmed with all the options available to establish our finances as a couple. Can you recommend any good sources that will help explain things in simple terms so that we can find our way through this? Thanks!

Michelle Singletary: Please check the archive for my Color of the Money Book Club. In Feb. I chose a book about couples and money that will be very helpful.

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Bethesda, Md.: I just got married and we just bought a house! I find that I'm making all of the financial decisions myself, which I don't mind, but sometimes I feel alone in whether I'm doing the right thing. I've based a lot of my decisions on your advice and several books/columns I've read. However, my husband doesn't really take an interest in helping out with these decisions and leaves everything up to me. How can I encourage him educate himself financially and pitch in a little bit? Thanks!

Michelle Singletary: This is a very hard question and a typical problem for many couples. As you know, it's so important that your husband get involved just so he can have your back (meaning you get a good second opinion). But just keep trying. Try to set aside a time every week or month to show him the statements and ask his opinion about decisions that have to be made. Send him e-mails. Give him an article or book when he heads to the bathroom for an extended time :) Or talk to him about the two of you seeing a financial planner. Having that third person to back you up often helps.

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Fort Washington, Maryland: What is your opinion of couples who ask for money to finance their wedding, house, honeymoon, etc. instead of a gift?

Michelle Singletary: I think people who try to "hit up" their friends and relatives to pay for a wedding,house, honeymoon they can't afford are rude. Unfortunately this is a growing trend. Heck why don't these people just set up a cash register at the wedding collect money as people go into the reception. It's rude, rude, rude. It's selfish, selfish, selfish. Just ask Miss Manners.

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Manhattan, N.Y.: Hi Michelle,

I'm submitting early because I'm really glad you are running this chat. My fiance and I have been together for years. In many ways, our assets are already combined -- we float each other during hard times, talk about money, do all of that -- but we've never formalized our finances. We just sat down last weekend to talk about money and I'm a little overwhelmed at how much there is to consider. Do you have a suggestion -- a course of action, a helpful book, a worksheet -- for how to combine our finances and take on joint financial planning in an organized way?

Michelle Singletary: Any good basic financial book will help you deal with all these issues. As I suggested to a previous person please check the archive of my book club. There you will find a number of books that will put you on the right financial road to merging your money and assets.

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Fairfax, Va.: I completely disagree with it's our money or we should stay single. My I have student loans, my husband owes nothing. It would be unfair to ask him to pay for my loans. This way we don't fight over money, where if we had everything in one pot we would definitely fight. You should remember, just because it works for you doesn't mean it works for everyone.

Michelle Singletary: I respect that you disagreed and you are right that some people keep their accounts separate and it works for them but people are asking me what I think and I think it's better to merge. And think about what you just wrote. Even if you are paying your student loans with "your" money you think that doesn't impact your marriage? The money you pay for the loans is less money for a joint whatever you might want. And why would it be unfair to ask your husband or wife to help you financially. You are married. I assume when you took your vows you promised to love, honor and be there for each other in every aspect. I take this approach because too many couples go into a marriage with the mind of a single person. It's my money. It's my debt. This is my house. My assets. It's not unfair to want to help your spouse so you both can become debt free. And if you fight because he would have to help you what does that say about him or her?

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Divorced in Potomac: While I agree that you shouldn't get married to someone you don't trust, statistics show that half of married couples will divorce, many acrimoniously and bickering over money, work bonuses and stock options. I know that my ex probably wishes we had had a prenup.

Michelle Singletary: You really think the fighting and bickering wouldn't happen with a pre-nup. do you watch Access Hollywood. People still fight even with a pre-nup. And 50 percent of marriages fail not simply because they are married. Marriages fail because people don't really know who they are marrying. They don't take the time to go thru counseling. They don't talk about financial issues before they get married. They are not equally yoked.

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Gainesville, Va.: On the subject of bank accounts - my husband was nervous to combine them all at first, his dad had 4 wives and his concept of sharing was skewed from his experience. So we started out with joint checking and joint savings and then each had our own checking and savings. 2 years later we merged them down to joint checking and savings when we were both ready to do so. The key is to talk about it and do what's comfortable for both of you.

Michelle Singletary: Good compromise.

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Michelle Singletary: Well folks I know you are tired of my preaching today! Look I know you all are grown and will do what you want with your money, wedding, honeymoon. But I just ask that you think about how you are approaching your relationships when it comes to the money. Separate accounts can lead to a lack of accountability that's all I'm saying.

Anyway, I've got to run. I'll be back online on June 30 at noon to discuss this month's book club selection "Take Control of Your Student Loan Debt." Hope you will join me.

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