Newlyweds: Don’t Let Financial Stress Take The Cake

There are so many things to think about when you’re just married, or about to be, and no Wedding ceremonyone would rate finances as the most exciting of them. In fact, studies show that money (not relatives) is the number one reason couples argue. Those financial arguments (again, not relatives) are one of the top predictors of divorce.

So, how can you avoid becoming a statistic? Here are some tips.

Talk To Each Other

A poll by the National Foundation for Credit Counseling found that 68% of engaged couples held a negative attitude about discussing money. 45% considered it “necessary but awkward,” while 7% said it was “likely to lead to a fight.” Five percent said they thought it would cause them to call off the wedding.

The result? Couples just don’t talk about finances. A Fidelity survey said more than one-third don’t even know their partner’s salary. The irony is that 72% of those same couples said they communicate “very well” about financial matters.

It’s not surprising, when you think about it. What’s romantic or sexy about debt, budgets, taxes, wills, and the like? But, while there isn’t a plan to keep every newly married couple happy, experts agree: Don’t wait to talk about money.

Taxes, for example, are boring (and scary), but they may be important right now. If you and your spouse are employed, the “marriage penalty” may force you to pay more taxes when married than while you were single. So, think about marrying in January rather than December. But if one spouse earns most of the money, you’ll enjoy a “marriage bonus” and pay less than two singles; a December wedding might be wise in that scenario.

Speaking about money now is definitely important, but so is how. A 2004 study by SmartMoney found that more than 70% of couples talk about money at least weekly. So what’s the problem? “Most of us don’t know how to talk about money,” says Mary Claire Allvine, a certified financial planner. “People tend to be emotional and reactive, not strategic.”

Whether you talk about money weekly, monthly or on some other schedule, what matters is that you agree on a system and stay open to changing it.

Get Started

Taking the first step can be difficult, so start off easy, with questions like “What’s your first money memory?” or “How did you spend your allowance?” Then move on to some of these:

  • “Are you a spender or a saver?” – If one of you is a saver and the other a spender, create a budget that considers both styles. Studies show that men and women spend differently. Women often take care of daily expenses (groceries, utilities, clothes) while men make larger purchases, such as TVs, cars or computers. The amounts might be the same, but the perceptions are very different. About 36% of partners don’t talk to each other about big purchases, and that’s a recipe for disaster.
  • “Are you in debt?” – A TD Ameritrade survey found that 38% of couples were “only somewhat” or “not at all” aware   of their partner’s debts. When you get married, your spouse’s debt doesn’t automatically becomes yours, but what he or she owes will affect both your choices. For instance, heavy credit card debt could make it more difficult to buy a home. Make reducing debt a priority.
  • “What are your financial goals?” or “Where do you want to be five or twenty years from now?” – People who identify specific goals make faster progress toward savings and investing targets. But first, you need to agree on what those targets are: buying a home, starting a family, being debt-free? List your individual goals, then share them with each other and make a joint plan.

Know what’s important to each of you. What do you value more, things you can keep or experiences to remember?       Maybe one of you wants to buy a house while the other thinks saving for retirement is essential. Get these things out in the open early.

Trust Each Other

A recent Money survey revealed that couples who trust their partner with finances feel more secure, argue less, and have more fulfilling sex lives. That level of trust, though, isn’t common among newlyweds. “We’re intimate with our partners in so many ways before marriage, and yet money remains off the table,” says Paula Levy, a marriage and family therapist.

Be honest. If you made a purchase you shouldn’t have, own up to it. Some 40% of men and women confess they’ve lied to their spouse about the price of something they bought, and lying about money can have huge repercussions.
Support each other. Retreating doesn’t help, and neither does finger-pointing. Work together to come up with a game plan.

You’re Still Individuals

Celebrate the differences. If your partner is a bargain-hunter, put him in charge of the spending while you invest the savings. And decide on a monthly amount each of you can spend, no questions asked. The average amount couples say this should be, according to Money, is $150.

There are pros and cons to opening a joint bank account. SmartMoney found that 64% of couples put all of their money in joint accounts, while 14% kept everything in separate accounts. For many newlyweds, the ideal choice may be both: yours, mine, and our accounts. Once you’ve determined shared living expenses, both of you can contribute your portion of those costs to the joint account based on your share of household income.

Ask For Help

If you and your spouse find money conversations tough, you might want to bring in a financial planner or other professional. Your credit union can help – that’s why they’re there. Take steps now to ensure that money won’t put rocks on your path to wedded bliss.

SOURCES:
http://time.com/money/4776640/money-tips-married-couples/
http://www.moneycrashers.com/money-management-newly-married-couples/
http://www.oprah.com/omagazine/Personal-Finance-for-Couples
https://www.moneymanagement.org/Budgeting-Tools/Credit-Articles/Love-and-Money/Ten-questions-to-consider-before-you-commit.aspx
http://www.huffingtonpost.com/2013/06/05/financial-advice_n_3391292.html
https://www.thespruce.com/financial-advice-for-married-couples-2302874
http://www.wife.org/love-money-25-financial-tips-for-couples.htm 

It Costs How Much To Get Married!?

According to a new report by a leading wedding magazine, The Knot, the average American wedding cost has eclipsed $35,000. That’s more than half of the yearly median income! Most of that spending isn’t on lavish luxuries for bride and groom – it comes from the guest list. Couples are inviting more people and doing more for them, trying to create an unforgettable experience for their loved ones.

If you’ve got an event planned for the coming year, read on. Your bill doesn’t need to be that extreme. Here are five ways to save on the cost of your big day! 

1.) Schedule smart 

Saturday is the most common day of the week for weddings. It’s automatically attractive, since everyone has the day off and most churches aren’t available on Sundays. Because of this popularity, venues are often more expensive on Saturday than on other days.

While the appeal of a weekend might not apply to a random Wednesday, you can pick a date that offers some of those same benefits without paying the Saturday premium. Try setting up your special day before a holiday, like July 3, or on the Sunday of a long weekend, like Labor Day. Your guests will still have time to enjoy themselves, and you can save as much as 15% on the cost of your venue. 

2.) Untether yourself


When it comes to picking a venue, the first obligation should be to find a place that speaks to who you are as a couple. Practically, though, there are several important factors that should influence your decision. Most importantly, pick a venue that allows outside vendors for food, music and photography (or negotiate with the venue you already selected). Places that do a lot of business in weddings may have existing relationships with businesses that can charge more because they’re not competing.
If you can get this kind of flexibility, shop around for better prices on some of the more costly parts of the wedding. You also gain the flexibility to get exactly what you want out of these services. If you want a signature cocktail instead of a full bar, for example, contracting with an outside party may be a necessity.
3.) Keep the ‘W’ word to yourself
From cake decorating to flower arranging, everyone has a “special” wedding price. Many vendors know they can get away with charging more for a service if it’s wedding-related than if it’s for another occasion. You can catch some savings if you keep the reason for the occasion to yourself.
For example, when shopping for a dress, buying a formal gown that’s not specifically labeled as a “wedding dress” can translate to savings. Getting a custom-decorated sheet cake (or buying a big cake and decorating it simply yourself) can save a few hundred dollars. By not mentioning the word “wedding,” you can easily save 30% at various vendors.
4.) Put your guests to work
The biggest costs for most wedding-related items is in labor. When you pay for flower arrangements, you’re paying about 10% for the flowers and 90% for the florist’s time. The same is true for cake decorating and place setting. Instead of hiring professionals, consider putting your guests to work.
It may seem awkward, but many wedding guests would love the opportunity to feel like they contributed to your special day. They get the feeling of participating actively in making your event a success, and you get to save a few bucks on nearly every service. It’s a win-win!
5.) Spread out the cost by using a savings club account
One of the biggest challenges for newlyweds is coming up with that much money all at once. All the wedding bills come due at the same time. For many couples, that means using consumer debt to finance the whole cost of their wedding. Doing so can make your dream wedding all the more unaffordable, as interest and financing charges add up.
Instead, consider setting up a club account to help defray costs. Set up an automatic withdrawal from your checking account into a dividend-bearing savings account. When the bills start coming in for the big day, you’ll have money set aside to defray the costs. Remember, a dollar you don’t have to finance is a dollar you don’t pay interest on. Even if you can’t absorb the whole cost of the event out of savings, why not borrow less?
Your Turn: What are your best cost-saving wedding hacks? Share your wisdom in the comments!

Personal Loans: The Swiss Army Knife Of Personal Finance


There’s that old saying, “There’s no such thing as a free lunch.” Turns out, it’s not just lunches that aren’t free. Pretty much everything costs money, and it’s often more than you’d expect it to be.

You can easily plan and save for some expenses, while some come up out of nowhere. For those things, you need to borrow, and a great way to borrow is with a personal loan. Consider these uses for a personal loan. If you have one of these events coming up, you may want to consider a personal loan to finance them. 

1.) Weddings 

Love knows no season. When the time is right to get married, it doesn’t matter if a few more months of saving would make a difference. Timing is everything! If you or your child is dedicated to hosting a spring wedding, it’s just not possible to pay for it with a Christmas bonus.

The average wedding costs just over $30,000, which makes it too much for a single credit card, and the interest you’d pay would make it incredibly more expensive. Even single vendor costs, like event space or catering, may require separate financing. A personal loan will net you a better repayment plan and a better interest rate.

You may even be able to bring the price of those transactions down. Rather than putting a deposit down with a credit card, you can offer to pay more of the total cost up front in exchange for a reduced bill. Caterers, tailors and other small business owners are likely to appreciate the simplification of their cash flow. They can pay their employees and purchase supplies without going into debt themselves. They may be willing to pass those savings on to you. 

2.) Adoption 

Adopting a child is a fantastic way to show your love to the next generation. It can also be very expensive due to screenings and fees that stand between you and your child. Realistically, costs could be as high as $50,000 to adopt a child in the US, and even more to adopt an infant from overseas.

Obtaining financing for this process can be very difficult. Unlike traditional big expenses, there’s no collateral. No one can repossess your child if you fall behind on your loans. Traditional sources of financing are out the window.

Fortunately, a personal loan can make this process a reality. Because the terms tend to be short, you can have your loan paid off long before you start thinking about college costs for your new bundle of joy! 

3.) Short-term house sales 

The success of shows like “Love it or List it” and other fast-paced remodeling displays has inspired a new generation of people to pick up properties, fix them up and sell them for a profit. For those who are handy and love remodeling, it can be a dream hobby. It can even turn into a full-time job! There’s just one problem: capital.

When you buy a house to sell again, it’s likely that you’re borrowing as much as you can to pay for the property. That doesn’t leave much left over for new fixtures, paint, or repairs. Some of that can be done cheaply enough, but much of it will require capital. Since you don’t have much equity in the property, borrowing against it isn’t a real possibility.

A personal loan can be the answer. With affordable rates and flexible repayment terms, a personal loan can help you finance those value-boosting improvements. Best of all, when you sell the house, you can repay the personal loan early without a penalty! 

4.) Launching a small business 

They say all you need to make it is a great idea. That’s about half right. What you really need is a great idea and enough money to get it off the ground. Even the most thrifty of business owners will still face start-up costs in materials, license fees and equipment purchases. While these costs may not be much, it will be a while before your business turns enough profit to recoup these expenses.

A personal loan can broaden your timeline to profitability. Rather than being pressured to start turning a profit immediately, you can take your time and develop the business. Since your debt servicing is a fixed cost throughout the course of the loan, it’s easy to plan for repayment. You can give your business the boost it needs to get firmly established, setting you up for future prosperity. 

5.) Extra education expenses 

Depending on your personal financial situation, your student loans may be insufficient to cover the actual whole cost of your education. Sure, you can get loans to cover tuition, but what about books or a computer to handle schoolwork? If you’re going back to school later in life, many traditional funding opportunities may not be open to you.

In these instances, taking out a personal loan to cover the extra costs of your education can be a life-saver. Instead of paying for those costs out of pocket or with a credit card, you can pay for them up front with a loan you can budget for going forward. Many parts of life as a student are unpredictable; it’s nice to have one constant month-to-month. 

YOUR TURN: What would you do with a few extra thousand dollars? Would you fix up a car? Take a dream vacation? Cover an unexpected bill? Let us know how you’d use a personal loan!


Financial Advice for Newlyweds

Important things to consider when combining your finances 
After you get married, there’s more that you have to worry about than which kitchen appliances you’d like to keep and which you’d like to give away. When you combine households, you combine finances too, and this isn’t limited to your savings and checking.


Debt 
As a married couple, you join together in debt, but how you join together is dependent on where you live. If you reside in a community property state, all of your debt is shared equally. Essentially, this means that if the two of you split up, each of you is responsible for half of it.

If you live in a common law state, the debt belongs to the person who accrued it. The only case in which you really share the responsibility is if you buy property together, such as a house or a piece of furniture, which can be considered a necessity for the family. Either way, you need to be careful with your credit. To find out more about how debt is divided, contact a tax advisor or legal counsel.

You want to preserve the person with the better credit ratings’ history if at all possible. If one of you is not responsible enough to repay debts on time for whatever reason, you may wish to keep that person’s name off of your loans. If that’s not possible because you need the dual income to be eligible for the loan, use automatic payments so you don’t have to worry about missing one.

Insurance Coverage
Another thing to think about is whether or not you want to combine your insurance coverage. If you merge to a single insurance plan under one of your employers, it’s likely you can pay a lower rate. Many employers offer a family plan, which can be ideal if you hope to have children in the near future. This could save you hundreds of dollars a year.

If, instead, you decide to each keep your own existing health plan, which is perfectly okay, you can still claim one another on each other’s plans and receive what is called double coverage. With double coverage, your primary insurance (the one you’re your employer) covers most of your expenses, but your secondary insurance (your spouse’s plan) can pay some of the leftover charges; for example, possibly your copay. If you opt for double coverage, keep in mind that some doctors do not accept it as a form of payment. Also, it may not be worth the extra money you’ll have to pay in premiums.

Another way you can potentially save money is by combining your car insurance. Most companies offer some kind of multiple vehicle discount. Getting married sometimes makes you eligible for policies that you wouldn’t have been able to get before even if you were living in the same household.

Filing Your Taxes
There are two ways to file taxes when you’re married, either married filing jointly or married filing separately. It’s smart to file jointly if one spouse makes significantly more money than the other one. When you combine the income of both, you could end up in a lower tax bracket since the brackets are higher for married people than they are for singletons.

When you file separately, it’s essentially the same as both of you filing as if you were single. You may want to go with married filing separately if one spouse has a lot of deductions – enough that they are considerably more than what the standard deduction would be. This sometimes happens if one spouse has a significant amount of medical expenses. If this is the case, you could get more money back come April 15th or pay less in during the year by adjusting your withholding accordingly. It’s also a good idea to file separately if one of you is having some trouble with the IRS. That way the spouse that is in good standing is not responsible for the other’s mistakes. To find out more about your tax options, talk to your tax advisor or visit irs.gov.

Now that you’re married, it’s time for the more fiscally responsible spouse to start holding the other one accountable. If you want to have a financially healthy marriage, the time to start doing so is today. 

This post is from our On Your Way site for young adults. Visit the site for more articles and video to increase your financial literacy!