Marriage and Money: Till Debt Do Us Part

Welcome to the webinar title “Marriage & Money Till Debt Do Us Part”
 
Marriage & Money
 
Marriage and money don’t always mix. If you want a happy life together, you need to talk about your finances well before you talk about a wedding ceremony. If you don’t? It’s not an exaggeration to say it could cost you your relationship.
 
According to research conducted in 2017, fighting about money is the second-leading case of divorce, right after cheating on your spouse. A separate poll of divorce attorneys showed that 4 in 10 marriages end because of financial issues, among other things.
 
That same research paints a grim picture for marital bliss. Almost two-thirds of all new marriages begin with one or both partners carrying debt into their relationship. They literally start off less than broke.
 
How to predict your divorce
 
Psychologists can even predict if money woes could lead to divorce. They get a pretty good idea asking just three questions. First, do you and your spouse argue a lot about money? Second, if either of you bring home a new purchase, does the other one get upset that it was a frivolous item? And third, do you solve your money problems together, or is it delegated to just one of you — the one who’s supposedly “good with money”?
 
How NOT to let money split you up
 
OK, now that we totally depressed you, let’s talk about how to make both your money and your marriage work out perfectly. The first step is simply recognizing the three big problem areas. So let’s set those up and knock ‘em down.
 
It’s amazing how much couples will talk about their opinions on politics, home decor, and favorite TV shows — but they never talk about money. And not just how much they spend and how much they owe, but how they THINK about money. So this is really three separate conversations.
 
The first step is simply sitting down and writing everything down. Who owes what on which credit cards? Got any student loans? Is your car paid off? In other words, what personal debts are you bringing into this marriage? Neither of you want any surprises. Add up all your monthly debt payments in one column, and both of your incomes in the other. If you’re paying more than you’re earning, you need to fix that first. We’ll talk about the easiest way to do that in a little bit. But first, it’s time for the second conversation…
 
Before you go into a marriage, you need to know each other’s expectations. Will you merge all your income into one joint bank account? Will you each keep some separate money? If one of you earns more than the other, do they have more say in how the money is spent? If one of you wants to make a major purchase and the other doesn’t, how will you resolve that? Time to get into the details. Time to role-play some hypothetical situations. Once you resolve these possible scenarios, time for the third big conversation…
Now we’re talking about how you think. When you get stressed out, do you engage in shopping therapy? Do you pinch pennies to such an extreme, you don’t want to make any big purchases, even when it’s a great deal? Would you rather scrimp during the week so you can blow it all on the weekends? There’s not a right or wrong answer to these questions, but not knowing those answers can cause problems later. It prevents your partner from misreading your intentions and actions.
 
The next big mistake is not watching your money AFTER you’re married. We’ve heard all the excuses before: Creating a budget is boring, it’s time-consuming, it’s hard to keep accurate. But there are safe online tools that take the drudgery out of budget, and it adds accuracy. Let me explain.
 
Mint, Tiller, and YNAB are just some of the budgeting apps that let you budget with just a few keystrokes. Many are free and some charge a few bucks, but they offer different features and have different looks. Choose the one that moves you. You can even start with your own bank or credit union, because many of them now offer similar budgeting tools on their websites.
 
Even if you do everything else we just mentioned, you won’t have a solid money marriage unless you keep talking every week. Married couples talk all the time about any doctor’s appointments and social engagements they have, and if they need to stay late at work. Well, you need to add purchases to that conversation. Money and marriages both need maintenance.
 
How one successful marriage works
 
As financial experts, we’ve counseled plenty of married couples. Here’s how they handled money when we met them, and how they handle money today. We’ll distill them all into one couple we’ll call Penny and Bill.
 
Penny and Bill fell in love but didn’t rush into marriage. They moved into an apartment together, and for a year, they planned their wedding. They talked about the food, flowers, and seating chart in great detail. They did complain about the cost, but hey, it’s a wedding! They decided this once-in-a-lifetime experience was worth blowing their budget.
 
Unfortunately, over the course of that year, they never talked about how they spend, save, and think about money. So after their beautiful wedding and a wonderful honeymoon, they had huge credit card balances to pay off. But of course, as newlyweds, they didn’t have enough cash on hand. So they had to carry that balance every month.
Penny wasn’t worried. Before they were married, she had a half-dozen credit cards that were almost maxed out. But she made minimum payments and always found a balance transfer offer that let her roll over her balances onto new cards. Bill was horrified. He said she was just running up more debt that would eventually catch up with her. He said he didn’t even know she had these steep balances. Penny told him to calm down, it’s not a big deal.
 
Bill looked at Penny’s credit card statements and figured out they averaged 20 percent interest every month. On top of the thousands they now owed for their wedding and honeymoon, he said if they made minimum payments, they wouldn’t pay off their credit cards until they retired – and that didn’t include any new debt. They both needed new cars, and one day, they both wanted a new home and a family. Penny replied that she’s lived like this her whole life, and everything always worked out. So what’s the big deal?
 
It turns out they discovered something about themselves they should’ve learned a long time ago. Bill is a planner and a plodder. He agonizes over every purchases and never buys anything until he’s done hours of research. Penny thinks of money emotionally and jumps on a good deal before it disappears. Together, Penny and Bill could take the best qualities of each other and have a strong financial life. But they were arguing now, and they were focusing on each other’s financial weaknesses instead.
 
Now that we’ve talked a little bit about how Penny and Bill got into these money fights, we can raise a new and uncomfortable topic: financial infidelity. It usually starts after the arguments begin. So what is financial infidelity?
 
What financial infidelity looks like…
 
Over the summer, US News reported on a poll of couples who engaged in financial infidelity. For the most part, that means not telling the truth, even if it doesn’t  mean outright lying. For example, the most common form of financial infidelity was buying stuff without telling your spouse. Also popular was hiding a debt you owe or a stash of cash you’ve saved up. Then there was lending money to a friend or family member without saying anything first. All of these are lying by omission. But as bad as these are, it gets even worse.
 
The next two types of financial infidelity involve actually stealing money and outright lying about money. First, a fifth of cheating spouses have actually drained a joint savings account without saying a word. And about 15 percent have looked their spouse in the eyes and said their salary was less than what it really is – so they could spend the extra without their spouse knowing.
 
By the way, astute viewers might’ve noticed these numbers add up to more than 100 percent. That’s because those who practice financial infidelity usually don’t stop with just one kind. They engage in multiple acts of cheating. So how do you catch it? Or better yet, how do you prevent it?
 
The signs of financial infidelity might not be easy to spot if they were limited to just one of two subtle behaviors. But financial infidelity often combines lots of suspicious activities. For example, is your spouse nervous about you checking your mailbox? Does he always fetch the mail? Does he suddenly own new things that he says were gifts from friends? Is he reluctant to show you the credit card statements? Does he volunteer to get off early from work to fetch the Amazon deliveries?
 
Why financial infidelity is so rampant
 
Of course, lying about money only works when someone doesn’t know the truth. But it’s easy to lie about your salary if you never told your spouse what you earn. In fact, 4 in 10 married Americans walked down the aisle without ever knowing what their spouse’s salary was. They simply never talked about it. That ignorance can lead to temptation, which can lead to financial infidelity.
 
So now we’re ending where we began. We talked earlier about talking. We talked about budgeting. We talked about teamwork. Financial infidelity is a warning sign that none of those things happened. No couple wants to suffer the fate of Penny and Bill. Avoiding that fate is as easy as talking.
 
If you need help figuring out how to start that conversation, we can help. You can speak to a certified credit counselor and receive a free debt analysis. That will give you the foundation for a productive conversation. And it will help you keep the conversation going over the long years of what will surely be a happy marriage! Thank you for your time today.
 
And in addition, Consolidated Credit may be able to help you save money and get out of debt faster than you can on your own. Our licensed and trained credit counselors will provide you, as I mentioned earlier, with a free debt analysis. We work with your creditors to lower your interest rates and eliminate fees. We also consolidate your credit card debt into one low monthly payment. Please give us a call at 1-800-210-3481 to speak with a certified credit counselor and start your path to getting out of debt. Also, go today to our website www.consolidatedcredit.org and tell us a little about yourself, and one of our counselors will give you a call. Again, thank you for your time today and make it a great day!