Monday, June 14, 2010

Monday Morning Matrimony: Money Talks

Two weeks ago on Monday Morning Matrimony, we discussed the importance of premarital counseling. One of the most important things I got from our counseling sessions was the importance of talking about money. I only wish we would have applied all that advice back then, but alas sometimes you must "learn things the hard way".

Dustin & I were taught different things about money, but in truth I don't believe either of us were taught near enough. That's not a bash to our families but to society as a whole. It is commonplace to be living a life you truly can't afford - to be swimming in debt, holding your breath, waiting for the big life saver to come around. There are so many great things I would like to use this blog to tell you, so many things I myself have yet to truly learn. But out of all these things the most important thing is this: COMMUNICATION! You & your spouse need to talk openly about money because money will be talking to you!

I am about to share something very personal with you in hopes it helps you avoid a similar mistake. In our family, I am the one that handles the books, primarily because I am the business owner and already handle the business books, so it all runs together. During the past few years, we have had our financial "ups and downs" and a few years ago, there were times when I would just not share with Dustin how bad the "down" was. He was trying to find a job and I didn't want him to feel worse, so I kept it to myself. In the end, it caused me to resent him and caused me to feel all alone with my burden. Dustin knows about this and how it effected us and we have long moved on. But it was a very difficult challenge that newlyweds shouldn't have to go through. I made a mistake because I was ill-equipped with how finances work and how to handle them. I thought "it will be so much better next month that he doesn't need to know about this month". But the next month was worse. (bills have a tendency to snowball - it's up to you how that snowball goes) Now, I know that sharing the "downs" means I have someone else to bounce ideas off of. The other important part of that is that Dustin needs to be interested in it. Finances on a regular basis don't seem exciting. A Budget is anything but fun. But the end result of financial freedom will be enjoyed by both, so it's only fair that you share the whole journey together. So no matter how difficult it is... no matter if you went out and overspent the credit card... TALK. We all make mistakes, especially with money. Don't let those mistakes put up a wall between you and your spouse. The top 2 reasons for divorce are Financial Problems and Communication issues - tie these 2 together and you're just setting yourself up for trouble. I want our financial future to be amazing, so we need to set up a great foundation.

So now that you know my personal story of what I've learned, here are some tips for newlyweds (and engaged couples) to pave the way for their financial future.

1) Check your credit report. This can be a scary thing and again - not fun. But you'll be surprised at what you might find and you can use this to clean it up and prepare for a house. Get a credit report that shows you the reports for all 3 credit reporting agencies. Our personal preference is

2) Set aside an emergency fund. We all have surprises in life. Why let a surprise change your course? The recommended minimum for an emergency fund is $1000. But every little bit helps!

3) Pay down debt. I wanted to pay off the highest interest debt first, but I now realize the importance in starting with the smaller debts - it really does work like a snowball. Also - if you are having a hard time paying credit cards, call the card companies. They will often settle for 50% or LESS of what you owe. Many credit companies are in major trouble these days and are more than happy to work out a settlement with you. I suggested this to a friend and she now has all her cards paid off! DO NOT BE AFRAID TO ASK! Don't let pride get in the way either. Start over, learn from your mistakes and move on. Also, it shows as a paid debt on your credit report so you come out looking much better than someone who pays late or is holding large debts.

4) BUDGET. Make a list of what all is coming in and what all is going out. You may be surprised to see what your fiance really makes / spends. And vice-versa. We tend to live with our heads in the sand, but learning where you are helps you get to where you need to be. Make a budget and learn to live like a king! Wisdom is power!

5) Wait before you buy. Oh, how I can attest to this. Sometimes it seems like we just HAVE to have something now. And it's not always as silly as a new dress. Sometimes we think we must get a newer car because our mechanic says we need $2500 repair on our current car. Well, first of all - get a second opinion. Secondly, think it over long and hard. If it really is going to be $2500, how much is your car worth? Also, how much do you owe? How much would you have to spend on a replacement car. Take ALL of these things into consideration. Do your research and sleep on it. Recently, my printer died and I thought I had to buy an exact replacement immediately. I looked up a comparable replacement and it was going to cost $500 (the original printer was $550) I decided to sleep on it and save my money. After taking emotion out of it, I ended up finding what I needed for $150. But then I did more research and found it on sale online (for new) with a warranty for $103 (after shipping). Trust me. AT LEAST give yourself the 48 hour rule. You will survive without a printer (it's not easy, but possible). You will survive carpooling to work. You will survive. I'm not saying there aren't emergencies, but if they are no life-threatening... be creative and don't let your situation dictate your bank account.

6) Daydream about retirement NOW. I know it may seem crazy and so far away, but if you can think of that as the ultimate goal now, it will change how you make your decisions. For instance, I want to retire by 50, so that would set me on a course for the next 17 years instead of 33. It also gets you thinking about IRAs and smart investing. It is not too early to think about those things.

7) DAVE RAMSEY. I could have simply said "Seek financial counseling" but this simple name seemed appropriate. You may not agree with everything he says, but he knows what he is talking about. He has changed so many peoples' lives. I encourage you to at least read his book "Financial Peace University". Read it together (or at the same time). Get on the "same page" with the idea of financial freedom!

Check out more great tips at

8) And don't forget my tip: COMMUNICATE!!! It's never as bad as you think it is. There is always a new day tomorrow and you can help dictate what that day looks like... together.

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