In the name of love and marriage, settle your financial differences
By TERRY SAVAGE email@example.com or @TerryTalksMoney February 13, 2013 7:14PM
Updated: May 3, 2013 12:15PM
Q. My fiancé and I agree on everything but money. He doesn’t want to spend a penny on our wedding, even though my parents are paying for most of it. And ever since we got engaged, he feels “entitled” to see how much I am spending. Since I work and pay for the things I buy, I think he has no right to see my credit-card bills. How should I deal with this?
A. I saved this email to use on Valentine’s Day — the day that lovers declare their forever emotions with hearts, flowers, chocolates — and forget all rational thinking. It appears that your relationship with money has been a perpetual Valentine’s Day. And one thing I can assure you is that you will come back to a difficult reality once you are married.
In fact, Thursday evening would be the perfect, mellow time to sit down and have a financial discussion with your fiancé. I suspect he is the “saver” and you are the “spender” in this relationship. Recognize that at this stage of life, neither of you is going to change the other’s basic relationship to money. Attempts to do that are only going to cause arguments that could, and will, tear your relationship apart.
The best you can do is come to an understanding of each other’s issues with money — and set up a system that respects each of your basic values.
The simple fact is that money “melts” in marriage. Suddenly you will be making plans and setting goals that involve combining — to some extent — your financial contributions to the marriage. That doesn’t mean that all of your spending and saving decisions must be mutual. It just means that you have to create a plan that avoids fights.
The first step is a discussion of why each of you handles money the way you do. It’s a discussion that calls for a willingness to listen on each side. When you understand the “hot button” issues — which basically revolve around control — you’re ready to go into action.
Sit down and make a list of regular and necessary household expenditures — rent or mortgage, insurance, electric and utility bills, food and entertainment, vacations. Then list the kinds of expenses each of you would be responsible for on an individual basis — your cell phone, your haircuts, your clothes and personal items. You’ll have to decide how to categorize some expenses, such as work transportation, or a car payment, which could be considered in either category.
The goal is to decide how much of your separate earnings you should contribute to a joint household account to pay the ordinary bills, and how much you should each retain to spend as you wish. That will eliminate a lot of fights. And it will give each of you some privacy about how you spend your remaining money.
First decision: Should you each contribute the same amount each month, or if there is a disparity in income, should you contribute proportionally? Remember, if you are using one person’s health insurance to cover both of you, that amount should be taken into consideration when you compare paychecks.
To avoid fights, the way to set up this household account is to have an automatic monthly deduction from your separate checking account that goes into the household account in time to pay the bills every month.
Savings is a critical category. Each of you should be saving the maximum allowed in your retirement plan at work. Or if you don’t have a company plan, there should be an automatic contribution to an IRA. And then you might also set up a regular debit from your joint checking account to a money market account, so you’ll have joint cash for unexpected issues like car repair or an appliance breakdown.
That seems simple, and basic, doesn’t it? Well, I’ll give you a chance to prove that you’re ready for the financial challenges of money and marriage. Instead of opening a bottle of wine tonight, sit down at your computer and go to www.AnnualCreditReport.com, where each of you can instantly get a free copy of your credit report. Print it out and exchange them. Then have a calm and reasonable discussion about how you will handle money. If you can do that, you’re ready for a happy marriage. That’s the Savage Truth.