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Wedding Week: Couples and Money

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Michelle Singletary
Washington Post Personal Finance Columnist
Tuesday, June 6, 2006; 12:00 PM

Money is not only an important factor to think about when planning a wedding -- it also has a large impact on the marriage itself. Are you financially ready for the next step?

Washignton Post personal finance columnist Michelle Singletary will be online Tuesday, June 6, at Noon ET to discuss financial issues couples face in planning their weddings.

A transcript follows.

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Michelle Singletary: I have to tell you this is one of my most favorite topics to discuss. First because far too few couples who are ready to walk down the aisle are READY to really merge financially. Couples spend months planning a wedding and less than a few hours (if that) talking about how they will handle their money as a married couple.

Secondly, I am thrilled because of my new book "Your Money and Your Man." And don't let the title fool you. It's a book for MEN and WOMEN. Although I'm talking to women, if you're a guy you will get so much of out if too!

Anyway let's get started.

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Washington, D.C.: Michelle! You're wonderful!

This time last year, I was reading portions of your wedding chat aloud to my then-boyfriend. It was a great springboard for conversations about marriage and money, and we both realized we were on the same page financially in many ways.

Within a month, he proposed. And because you reinforced our thoughts that you shouldn't go into debt to have a wedding, we saved, planned, and had a wedding in April without going into debt. Hooray!

So I wanted to say: THANK YOU!

And brides and grooms -- listen to Michelle! And talk to each other about money.

Michelle Singletary: I just had to start off the chat with this wonderful letter. Not to toot my own horn ...oh who am I kidding :)

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Olney, Md.: Eighteen months into marriage. I wanted to drop a line to say I was THRILLED to see this as the second chat listed!

It is very important to have your ducks in a row and honestly discuss tax implications, bills, debt, future plans, how to combine everything, retirement (had to switch all my beneficiaries on all my accounts, what to make joint and what not to, etc.), children, cars, EVERYTHING. Plus we must not fear; we must keep talking. I realized I was afraid to say something to my husband 2 weekends ago about how much we had given as a graduation gift. At that point I realized we had miscommunicated, and I had made an error. Even how much to spend on Christmas presents and to whom to gift has been up for discussion. We have to talk and we have to own up. Watching friends hide purchases for weddings and other daily items scares me. A wedding is possibly the first big budget item you are planning for. I think it took as much work on a heartfelt balancing level as buying a house. In my book (in my 30's when married and watching plenty of friends along the way) working out the financial side and marriage counseling are the two key parts of preparing for marriage. The counseling to help make sure you talked about 'everything' (even after 8+ years together talking and talking up a storm we had one issue we identified we needed to work out), learn how to better communicate with each other, and become comfortable with seeking outside help and working on big problems when they come in the future.

Life changes, and you need to know you have real support and where you stand when it counts.

Michelle Singletary: Well Mrs. Olney what great advice to help start this chat off. And Congrats on a great start to your marriage. When it comes to love and money communication is so very key. And when I say communicate I mean talking to each other in a loving way. No griping. No sniping. No insults. No cussing. As the queen of soul says R-E-S-P-E-C-T.

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Washington, D.C.: Who is suppose to pay for what?

Is the total cost of the wedding the responsibility of the bride's parents regardless of age?

Michelle Singletary: Well my dear times have changed. Only about a quarter of parents (the bride's parents that is) actually pay for the wedding anymore. Most often these days it is the couple getting married that pays for the wedding. And that's because many of the parents don't have the money.

Age has little do to with it other than the older you are the more money many parents expect you to have and therefore you have the ability to pay for your own wedding they feel.

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Vienna, Va.: So what do you think is a reasonable budget for a wedding? We're not rich and neither are our parents, but we haven't even started pricing things, but would like to set a cap on how much money we're going to spend total

Michelle Singletary: Start first with what you can afford and THEN fit the wedding into that budget. If you start with a wedding in this area cost $26,000 (seriously) then you get stressed and think you HAVE to spend that or close to it.

Look at what you have in cash (even if you are going to pay with credit). By that I mean what have you saved up for the wedding. Then plan accordingly. That might mean having a small reception or a reception at a restaurant with just close friends and family (say 20 people). It might mean doing what a friend of mine is doing. She and her intended can't afford a big reception so they are having chocolate, little cake etc. in a hall at the church. Then they are having a dinner for just the wedding party and parents.

Contrary to popular belief you can have a wedding for just about any cost from $25 to $25,000.

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Staunton, Va.: Michelle -- love the straight-forward advice! Okay, I used to be very bad with money and I have cleaned myself up past the break-even point. Now that I have no debts (not even a car note) and I have a couple thousand saved, I have become what I would consider miser-like. Now that I can afford an expensive coffee whenever, I still make it myself. I eat peanut-butter/bread sandwiches nearly every day for lunch. In the evolution of people's monies, what comes next? Will I "even out" and start to loosen the grip or am I doomed to be penny pincher for the rest of my life?

Michelle Singletary: I know off the subject but couldn't resist. You are a nubie penny pincher and going thu the newest of being frugal. That's okay. You will loosen up hopefully. Just pick some things or one thing that you buy without thinking about cost. For me it's UTZ potato chips. I buy them even if they aren't on sale. If designer coffee is your thing -- then treat yourself. The point is to spend where it matters and save everything else. So if it doesn't bother you to eat peanut butter sandwiches every day go for it and eat them with some good coffee.

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Washington, D.C.: My boyfriend and I have been together for quite a while and are discussing marriage. When it comes to money, what are the key questions we should answer and discuss before taking this next (HUGE) step?

Michelle Singletary: On the site about this week's wedding package you will see a quiz "Talk is Not Cheap" from my new book. Take the quiz. It has about 20 questions you should ask before you get married. You each should take the quiz by yourself and then come together to compare answers. I'm telling you it will be an eye opening experience.

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Arlington, Va.: I agree it is crucial to discuss these things. Recently my fiance made some comment to me about our "joint bank account." I was like, "uh, what?" This prompted a discussion of how we will merge financial issues. We agreed to have a joint savings account and a joint checking account (for paying monthly expenses) but to also have individual checking accounts for discretionary spending. Additionally, my loans for grad school (which I intend to start shortly after the wedding), will fully be my responsibility. We've agreed to each set aside a certain amount each month towards a house downpayment, and to accrue no credit card debt under any circumstances. I'm sure we've forgotten something, what else should we discuss?

Michelle Singletary: Not having those individual accounts.

Seriously you are on the right track but why not run the complete race to being ONE. When you get married your debts should become something you BOTH tackle. It's not your debts anymore. Think OURS about everything including saving for your home together. If you are getting married you have to get out of this mode of mine and his or mine and hers.

It's not about YOU anymore. You don't need any separate accounts for discretionary spending if you are talking about all your spending. What you could do is each agree to have a weekly or monthly allowance that you can spend no questions asked. Everything else becomes one.

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washingtonpost.com: Wedding Week

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Washington, D.C.: Just got engaged. Thanks for the chat. I'll try to keep this quick. How much money do we realistically need to have on hand for a quality downpayment on a house? I'm trying to figure out what is the best use of our money, a house or a 4-hour party that I probably won't even be able to enjoy as much as I should because I know how much money I'm thowing down the drain on it.

Michelle Singletary: Personally I vote for the house. But I'm sure you would have guessed that.

Look in most areas of the country getting a house even if you don't put down a downpayment is going to cost you upwards of $25,000 or more...much more with closing cost,etc.

That's about the avg cost of a wedding. If funds are limited I vote for something that first will appreciate in value.

But having said that I don't think money spent on a wedding is throwing money down a drain. A wedding and reception can be a beautiful thing and a chance for friends and family to celebrate a beautiful thing. So it can be worth it IF and I mean really IF you can afford to throw yourself a wedding and come back to save for a home. It can be done.

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Washington, D.C.: I have about $15K in my 401K plan right now. I'm 28. On a scale of 1-10, 1 being smart, 10 being unbelievably stupid, how bad an idea is it to try to cash in the 401k to pay for a significant portion of the wedding, and start anew?

Michelle Singletary: On a scale of 1 to 10 with 10 being stupid (your word not mine) I would say cashing out your 401 (k) to pay for a wedding would be a 20.

First you won't net $15,000. You will net about half of that with penalities and taxes. Second do you really want to start off your life robbing Peter to pay for Paul's wedding, which means you can't afford the wedding. Let your retirement money be. It's great that you have that much saved up already. Don't blow it. Instead save for the wedding and if you can't wait to save have a wonderful ceremony and serve Kool-aide and cake to guest whom you can say we are saving for our future home and retirement please enjoy these light refreshments.

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Arlington, Va.: Just an observation -- as a multiple bridesmaid (6 six times) -- I noticed that the most elaborate wedding I participated in resulted in the shortest marriage (1 year). The simplest wedding I ever attended was for a cousin who had a cake/cookie reception with punch in the church basement. She's been happily married for some 20 plus years.

Michelle Singletary: Can I get an "Amen."

Been my experience as well. Not to say that if you had a big, expensive wedding you haven't had a great marriage.

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Arlington, Va.: To all the brides-and-grooms to be, from the voice of experience:

Please learn to handle your finances together, before you get married. Money fights were a major reason for my divorce, and I must share some of the blame for those fights. You must, must, must be on the same page, with each party getting an equal vote. The preacher will tell you, "Now you are one." One way to stay that way is to act like it. No separate checking accounts, no spending major dollars without the other person enthusiastically agreeing, no making the other person feel guilty. You will be SO thankful for it. As the old saying goes, "Marriage is grand; divorce is ten grand." Divorce is a wealth killer, and a good marriage is a PERFECT vaccine against it.

A post-script: I do plan on getting married this year to a wonderful woman, and we're already talking a lot, and comfortably, about marriage.

Michelle Singletary: Can I get another "Amen."

I love the voice of experience and reason. Keep those voices coming.

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Virginia: I have a friend who is NOT getting married because they don't have health insurance and they don't want the woman's assets to be taken if the husband gets sick. I know, I know, they should have health insurance, but can you answer the question: can a spouse's assets, in her name only, be taken for a husband's medical debts?

Michelle Singletary: This is a tricky question. If your friend lives in a community property state and they get married and the spouse incur medical debt, yes her assets could be used to pay his debts.

If they don't live in a community property state and they do get married and she signs any forms saying she is responsible for his medical expenses (which she may have to if he's too sick to sign forms) then it is possible her assets could be used.

But on a deeper level I'm actually pleased to see they are NOT getting married because you know what they aren't ready for marriage. Think about what they are saying. She loves her assets more than using any of them to take care of the man she loves and might have married. She should stay her butt single. It's a good thing.

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Washington, D.C.: I know you don't recommend having separate checking accounts if you are married. My question is -- how do you make sure you have enough money in the joint account and won't over withdrawal money? What if my spouse and I each bought something expensive on the same day with our debit cards? Like, I went to the grocery and apent $150 and he had car repairs to buy? At least with my own checking account, I always know what is going on, but having someone else being able to withdrawal money sounds totally scary to me.

Michelle Singletary: Ah, use your cell phone, which I'm sure you have to call and say I'm at the dealer and it's going to cost xxx do we have enough to cover xx.

Really how hard is it to talk to each other about an expenditure. Hopefully you have a cushion built into your checking account anyway but you know when you are going to the grocery store right? IF not as if you will be kipnapped and taking against your will to the store and spend $150. So talk. Agree that only one of you take the checking book. Or the night before you know you have to take the car in or go shopping you both check to see what's in the account.

Online banking is a beautiful thing. And if you are totally unsure about this and not good at keeping track than get overdraft protection for the times the communciation does and will break down.

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Silver Spring, Md.: Michelle -- I'm a newlywed who really appreciates your advice. My question is, how do you you get a man to participate in the paperwork? He knows he needs to enroll in a 401k and switch beneficiaries, we need to draw up a will, etc. But he never seems to get around to it. I'm terrified that it will never get done. He says he knows it's important and I believe him -- but I need action! Do you or any of the other chatters have any suggestions for turning a good man's talk into a good man's deeds?

Michelle Singletary: I hear this a lot. It's a problem. If feel for you.

So why don't you get the paperwork yourself (he's got to have it in the house at least right). Fill it out and take it to him while he's watching the game and have him sign it. Then if you have to you drop it off at his benefits office.

Then you schedule the appointment with the lawyer. Tell him you want him to go with you to get some sexy underwear. On the way to get the underwear stop by the attorney's office.

Ok kidding on the last part -- well just a little bit -- but you get what I mean right. Often one spouse is a doer the other is a put offer. So unfortunately and as frustrating as it may be you have to be the one to act.

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Distance Wedding: Michelle,

This is somewhat related to today's topic. I have a very close girlfriend who is hosting a distance wedding this December outside the country. The price for my husband and I to attend is roughly 3k! We just bought a house and do not want to take from our emergency savings to go -- is that wrong? She was at our wedding and is upset that we are not going. We actually found out about the upcoming wedding a few weeks before closing on our new home. Help -- what should I do?

Michelle Singletary: Oh my, I'm so writing about this soon perhaps on Sunday. So if anyone else is in a similar situation please, please e-mail me (singletarym@washpost.com).

Anyway, if you can't really afford to go, then don't go. Your girlfriend is so very wrong. You are so very RIGHT.

Do not under any circumstances use your emergency money and if she still gets mad have her call me. I'll set her straight for you. I mean it!!!

This is what you do. Write her a very loving letter. Tell her how much your friendship means. Tell her you so appreciated her coming to your wedding. Tell her you wish you could be there for her big day but you just can't afford to come to her wedding (you don't need to explain in gritty details why since you've already have I'm sure). Then send a very nice wedding present on her return.

If after that if your friend still hassles you -- kick her to the curb cuz she ain't no friend. A good loving friend would be very, very disappointed but not upset at a friend who can't afford to shell out $3,000.

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Discretionary funds?: Michelle -- I know you're not a fan of seperate accounts, but I was wondering what you think about our arrangement. We share all accounts except that we each have a small "fun" account. He puts in $40 a pay period, and I put in $93 (there's a reason why it's unequal, not a big deal at all). This way, he can buy his hobby items, and I can buy my jewelry baubles. We both know that this money really technically belongs to us both, since it's money that's being diverted from our joint accounts. I don't buy my jewelry unilaterally, nor does he spend his money without chatting with me. Is this still bad?

Michelle Singletary: Not bad really just unnecessary I think. And this is why. I love it that you have an allowance. And actually without knowing all the details I understand why there is a difference or could be.

But let's say one money or week or whatever you don't spend your $93 on jewelry. That money stays in the joint account and can be used for whatever. You don't have a problem with it because you really didn't need it anyway.

I have an allowance but hardly ever use it. So that's more money in our account. What happens to money not used in the separate accounts? Can it be used for joint expenses.

Again, not bad and look if it works for you and all accounts are accessible to all then it works for you. Just more juggling and accounts and possible bank fees in my opinion.

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Virginia -- follow-up: Actually, our friend lives in Virginia -- so not a community property state. They are a very committed couple, have been together for a decade, and have one child. He is a stay-at-home dad so she supports him completely. They are paying extra thousands a year 'not' to be married since they don't want to risk losing the child's home, etc. They would be married in a heartbeat if it weren't for worrying about this. So thanks -- you may have helped yet another couple get married!

Michelle Singletary: Sounds complicated but still glad to be of assistance.

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Washington, D.C.: We are planning on getting married August 2007. We are both in our 40's. We are finacially set and we have a 10-year-old son. How much is too much to spend for a wedding at our age?

Michelle Singletary: How much is too much. When you have to go into debt or it derails other more important purchases like a home or paying for college for your son. If you have a home and you are on track to save for your son's college or have the money for his education then spend whatever you like.

What I object to is folks spending sinful amounts of money on what amounts to a 4-hour party then whining they can't buy a home or send their kids to college.

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Washington, D.C.: Suggestions that worked well in my household:

(1) Regarding your wedding - don't make your attendants buy new dresses. I let mine pick out whatever they already owned and felt pretty in, and it worked out great. It also added a touch of informality that kept me from going over the top on some other items.

(2) Regarding a joint checking account -- our rule is the checkbook stays home and each of us only carries 1 check around. That way we reduce the likelihood that between the 2 of us we will write too many checks on any given day.

(3) See if you can share a cell phone. We did this for many years -- the person who would have the hardest time getting to a landline got the cell phone for the day.

Michelle Singletary: Love, love your ideas. Thanks.

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Manassas, Va.: Hello Ms.Singletary,

My name is Taneshia Langley and I was listening to you on the radio today talking about debt. There was one thing in particular that caught my attention and that was buying someone out of a mortgage or getting bought out of a mortgage.

When I was 18 my mom asked me to co-sign on a mortgage. I know, I know, bad idea. Now I am thinking about purchasing my own home but I am really trying to get out of the old mortgage.

I am willing to hear any advice you can give me.

Michelle Singletary: To get out of this mortgage your mom will have to be able to refinance on her home ...meaning you could try to refinance the house using just your mom's income and credit standing. If that is possible then you can get off the mortgage.

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Distance Wedding: I'm having a distance wedding (though any distance for some people wouldn't work) and have a number of guests that can't come -- due to money I suspect. What I have appreciated more than anything else is people telling me that they can't come b/c it's too much money. I can totally understand that. What I find difficult is people who don't offer any explanation or one that sounds lame (my kid has a little league game).

Michelle Singletary: I was with you until the last part. As a mom if that little league game is a big game or important to my child I may have to decide not to come to your wedding. Don't see it as an insult to you or should I say don't take it personal if someone doesn't want to come to your wedding. It's an invitation not an order, right?

Anyway, the first part was right on. And people if you are invited please respond. Don't make people spend money for no shows.

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Alexandria, Va.: Why do people spend so much money and go into debt for a one-day event? Why do people have so many bridesmaids, flower girls, etc.? Why do people ask for money in lieu of gifts?

Why do people get married and then act like college roommates regarding bills and other financial commitments? His money, her money and hide money? If it isn't OUR MONEY, ain't this the first sign of marriage trouble? Who wants to spend fifty + years splitting the cost of a loaf of bread, eggs and utilities? I can hear it, "I was on travel for a month so you used the AC not me."

Michelle Singletary: Whew....glad you got that off your chest.

But I hear you. But keep in mind as I have to that some people (Ok mostly women) dream all their lives of this BIG day and in the process do lose their right mind.

However, as I said earlier nothing wrong with a wedding, big, small whatever...as long as you do what you can afford.

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Arlington, Va.: Hi, Michelle:

My husband and I married in May. We bought a house last summer. (Yes, backwards, we know!) The disparity between our incomes is about $15,000, and we both earn over $60,000. I can't find a simple resource for figuring out how we should file our taxes (jointly or singly) and how/if we should each change our allowances now to avoid getting a big refund. Right now we each claim allowances, and still got a refund last year.

No high medical expenses for either of us. He's making student loan payments. We both give to charity.

We really need help figuring this out and aren't sure if we should visit an accountant, tax person, CPA, or what. Can you please advise?

Many thanks!

Happy but confused ...

Michelle Singletary: Sounds like you might need to see a CPA. Do it now so you can make whatever changes to your W-4 to balance out your tax situation for the rest of the year.

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Discretionary funds again ...: You asked what happens if the money isn't spent in the allowance fund? Well, it usually isn't spent on a weekly basis -- more like a yearly basis. I spend for months or a year or two and I buy a large item of jewelry. Hubby has made his first purchase since getting married almost two years ago -- a big mixer-thingy from Williams Sonoma. I guess our point in having the discretionary funds is so we can save for things that the other has no interest in.

P.S. -- the reason why the amount is unequal is b/c we always keep our bonuses for ourselves (not big, since we work for the feds). Last year my bonus was a quality step increase, which meant that it was paid out to me over time through a pay increase, and not in a lump cash sum. So, my bonus QSI amounted to an additional $53 a pay period, hence the $93.

Michelle Singletary: I see. Ok. But my husband and I save for what we want and the other has no interest in in the joint account and no issue.

We each just take out the money when the need comes up.

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Observation of a Married Lady: Michelle, I want to second your vote for combined finances. I know that indpendent-minded folks are pre-programmed to disagree with this, as my husband and I were when we married three years ago. We kept the joint checkings and saving, with small individual accounts on the side, for about a year. We finally realized we were just confusing matters, and couldn't really see what the point of the individual accounts was, since any major purchase had to be discussed in advance anyway! So we got rid of the individual accounts and have never looked back. It's much simpler. Just my $0.02!

Michelle Singletary: And 2 cents that is worth a fortune.

Thanks.

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Reston, Va.: Michelle -- I'm getting married in November. I'm in my late-thirties, and after having gotten through medical school on loans and having worked very hard professionally, I've finally come into my own, having started a job where I'm making a substantial salary that will enable me to pay off my student loans in the next year and a half. I have more assets than my finance including some retirements savings and real estate (I have a condo that I'm about to sell for which I'll make a nice profit), and I currently make about 3 times what he does. I love my finace dearly, and with each passing day he earns my trust more and more. Nevertheless, as hard-won as my own success and financial stability have been, I feel some instinct to protect them and maintain separate finances for some period of time. Any advice on separate vs. merged finance in a new marriage?

Michelle Singletary: Well since we are near the end of this chat I know you know what I'm going to say.

Merge, Merge, Merge, Merge right from the start.

But dont merge, merge, merge, merge meaning get married and merge your finances until you completely trust the person you are going to marry. I really advise that every couple getting married should go thu pre-martial counseling and a program that includes a comprehensive financial component.

Once you do that then you both can rejoice in what you have both accomplished.

Remember once you get married it's not about you anymore!

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Cleveland Park, Washington, D.C.: I know this is an awful question, but my boyfriend's parents have mounds of credit card debts. He is an only child. He is responsible to pay that back if something happens to them?

Michelle Singletary: It's not an awful question. It's life.

And no he is not responsible for their debts unless he co-signed on any of those debts.

Also it's not an awful question because your gut is probably telling you that if you two get married his parents finances might become your problem even if he isn't contractually responsible for the debt.

And your gut would be right.

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Poorhouse, Va.: We are six months away from our wedding and have been discussing money and how we will approach it for the past several months. However, we still seem to be discussing (and at times arguing about money) more often than ever before. Of course, this makes me nervous for our future ... I want us both to be on the same page financially. To add to the challenge, I am a saver and he is a spender (this is the first time he has never had credit card debt). I know part of it has been how we were raised to think about money, and how we handled it beforehand. Please advise as we will soon be a partnership and I do not want this to become all-consuming. Thanks!

Michelle Singletary: Don't get married until you resolve this issue or you feel comfortable you have a plan to deal with your difference.

I'm so very serious about this. This is the time to realize and discuss and maybe even break up. Because breaking up once you get married is hard to do.

Don't be afraid to end it if you can't see handling this together.

Please get pre-martial counseling so you can both get the tools to figure out if you can work this out as a married couple. Trust me things will not change once you get married.

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Springfield: Michelle,

Thanks for all your wonderful advice. As a married lady (5 years this July!) with a 3-year-old and a baby on the way, I just want to let all the young (or middle-aged or older) engaged couples know, the wedding is a lovely celebration of your commitment to each other. After all the wrapping paper is thrown away, all you really have is this other person you need to make a life with. All the fondant-covered cakes, balloon arches, Vera Wang gowns and exotic flowers will not make a whit of difference. And when you have been married a while, and you're looking through the album or watching the video, you get sentimental thinking of the words you spoke to your spouse and the people who were there with you, not the bridesmaid dresses or the zillion-item buffet.

Michelle Singletary: And let this be the last "Amen."

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Michelle Singletary: Thank you all for joining me today. The questions and comments were just amazing and thoughtful and I'm sure very helpful to a lot of folks. Love you guys.

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