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’Til Debt Do Us Part

Advice for a financially secure happily-ever-after

When Cami and Hans Hubrich were hitched in November 2006, they suspected married life—in terms of finances—couldn’t be too different from being single. After all, the Salt Lake couple had graduated from college, were working full-time jobs and earning steady incomes.

But with the added expenses of a new mortgage, groceries for two and double car payments, they soon realized their financial situation was far different from what they had imagined.

“We began living paycheck to paycheck,” says Cami. “We didn’t have any sort of budget. I would go to the grocery store not knowing if I could even afford to buy food.”

Cami and Hans’ experience, and the anger and stress that soon followed, echoes that of many newlywed couples learning not only how to live together for the first time, but also how to spend and save together.

Communicating About Money

With the excitement of getting engaged and making wedding plans, finances are the last topic a bride- and groom-to-be want to talk about. Let’s face it: Choosing invitations and shopping for a wedding dress are far more fun than discussing debt or creating a budget.

But, says Kristin Burnett with Wasatch Family Therapy, couples must discuss financial topics before saying “I do.” “Finances can be awkward and uncomfortable to talk about if you have debt or habits and lifestyles that you don’t want your partner to know about,” she says. “But it’s important to establish a level of trust and the ability to communicate about difficult topics.”

Waiting until you’ve tied the knot to admit to your spouse that your Nordstrom credit card is maxed out or that you owe thousands of dollars in student loans can put your relationship—not to mention your finances—in panic mode, or what Burnett calls a “mini-crisis.”

To prevent this from happening, couples should communicate before they’re married about three things: financial histories, attitudes towards spending and saving, and financial goals for the future.

In this conversation, all cards should be put on the table—literally. Both parties should reveal current account balances (checking, savings, credit), past debts (even if they’ve been paid off), past financial problems or successes, and what each person wants in their financial future, such as a home mortgage or investments in the stock market.

During this discussion, couples should also decide whether to have joint or separate checking accounts. While some couples feel unified through joint accounts, others feel restricted and prefer to keep their incomes separate. Some couples mix it up and have separate checking accounts with a combined savings account. Whatever you choose, speak honestly about your attitudes toward separate or joint accounts, and make a decision based on what will be best for both of you.

Next, discuss your spending habits. Identifying how you and your spouse spend and save money will help you better plan for and implement a budget. “You may have one person that’s a penny pincher and one that’s more liberal with their spending,” says Burnett. “Talking about these habits when you’re engaged is a lot better than waiting until after you’re married.”

Cami admits that while she and Hans have improved their financial situation since they were first married, she wishes they had educated themselves on becoming financially prepared while they were dating or engaged. Although it’s hard to know before a couple is married exactly what their financial situation will be, just talking about future expenses beforehand can relieve stress later.

Budget Basics

While everybody wishes their bank accounts were bottomless, most couples have a limited number of dollars to spend. To organize and plan for expenses, couples should create a budget together.

First, both parties need to look at their total income for a month’s time. Then, on paper or in a spreadsheet, both should list all expenses with a dollar amount attached to each item, such as a mortgage, car insurance, groceries, gas and expenses like trips to the salon, going to movies or eating out. Next, both need to account for how much money is used to pay off any debts, and how much is put away each month into savings and emergency funds.

After everything has a dollar amount, discuss where extra dollars should be allotted—or where funds should be cut back. Couples can then use this planned budget to keep each other within spending limits. Keep in mind you can review your budget and adjust it weekly or monthly, depending on changes in financial situations.

“You need to give every dollar a place, so you don’t just blow it,” says Cami, who has, with her spouse, worked out an effective budgeting system using envelopes. Each week, she and Hans decide how much money to put toward groceries, gas, eating out and other expenses.

Then, they put cash into envelopes labeled by expenses, and use it accordingly. This method allows the couple to account for expenses and adjust them based on their needs.

For example, if Hans spends more money on groceries than he has in the “groceries” envelope, the couple can pull dollars from the “eating out” envelope. “It’s really nice to have a plan and know where money is going,” Cami says.

Burnett says having a budget and regular family planning sessions are key to financial success for couples. Burnett advises that, in this meeting, couples should talk about whether or not the budget is working.

Also, couples should discuss family financial goals, such as a new car or that long-awaited Caribbean cruise. “It’s always nice when you dream together and have fun things to look forward to,” says Burnett.

Overcoming Obstacles

If you find financial problems still arise despite making a budget and setting financial goals, the issue might lie deeper. The infatuation of marriage will eventually fade, and as the honeymoon phase wears off, “negative sentiments can increase as the reality of daily living with somebody takes its toll,” says Dr. Don Herrin, a Utah-based social psychologist, who teaches a class at the University of Utah on strengthening marriage and families.

Add financial problems to this new stress, and marriage might seem like more trouble than it’s worth. Herrin suggests couples “establish and develop a deeper friendship” by learning to accept each other’s influence. If one partner wants a looser budget in spending money, but the other would rather save, both should explain and listen to each other’s reasoning. One might come from a family that saved every penny, while the other grew up in a household where spending every dollar earned was acceptable. Whatever the history, couples should listen to each other’s reasoning about why different financial priorities are important to them.

Listening, says Herrin, leads to understanding, and when understanding takes place, flexibility will, too. Together, a happy medium can be reached that satisfies both parties.

“Taking each other’s opinions and feelings into account is part of accepting each other’s influence,” says Herrin.

Cami and Hans were able to accept each others' influence by coming up with a financial plan that worked for them. Their advice? Listen to each other, communicate honestly about your finances, and create a budget that will allow newlyweds to be in control of their finances and keep money-related stresses at bay.