Thursday, February 21, 2013

Frugal Newlyweds Financial Guide Part 1: First Financial Date

In honor of one of my husband and I's friends who is getting married this weekend I decided to write a small series of posts that can be a financial guide for newlyweds or soon to be newlyweds.  We've been married almost five years, so I think that qualifies me in two ways.  First, we've been married long enough to see some results of the decisions that we made early on and second, we haven't been married so long that the financial world is that different now than when we first married, so our advice would still hold.  I recently read a book that was written a little over ten years ago and it talked about 7% CD rates.  You'd be lucky to get much more than 1% now!

Today I am going to focus on what to do pre-newlywed status, i.e. when you're engaged.  During this time period it is really important that you really get to know your fiance well, not just emotionally, but financially also.  You don't want any huge surprises after you're married, although there will always be some surprises.

Now, if you are like most couples either one or both of you just groaned and said, that is so unromantic.  I'm here to tell you now that sometimes you've got to do some unromantic things in order to save your marriage ahead of time.  Many marriages are brought down by money issues, so you want to get them out in the open before you've sealed the deal.

First, plan two financial date nights.  The first one can happen anywhere.  The second one, I suggest cooking at home or picking up take out and going back to one of your homes so that you don't risk the chance of losing important financial documents in a public place.  You never know what a weirdo might do with your old credit card bill.  I will give you details on that second date in my next post.

For the first date night your main goal is to talk about your parents/guardians and how they earned, used, viewed money.  You don't need to talk about your own personal money situations yet.  Knowing the way money was handled when your fiance was growing up will really help you understand some of the things he or she does.  It definitely opened my eyes to some of the things that I saw my husband doing.

Before you start asking questions make sure that you both realize that these questions are there to guide discussion.  Be careful not to make judgmental comments about your future in-laws.  Each of your jobs is to answer as best as possible and then to listen.  Don't give a commentary about the other person's upbringing.  You are just fact-finding.

Here are a list of possible questions:

  • What jobs did your parents have growing up?  Did they switch jobs frequently?  If they did, why
  • What type of home did you grow up in(apartment, duplex, small/medium/large house)?  Did you move a lot?  Why?
  • Did your parents have debt while you were growing up?  If so what type, car, home, credit card?  Why?
  • Did your family go on vacation much?  Where did they go?  What did they do?
  • Do you consider your parents savers or spenders?
  • Are your parents investors?  Explain.
  • What was your parents view on money?
  • What was your parents view on giving?

If you aren't used to talking about money, this is going to be incredibly painful.  However, just like exercise it is really necessary.  If you haven't talked about money you are like those 400 lb people on the Biggest Loser.  It's going to take some time and effort, but you can get that financially flabby body in shape!

This conversation is something you might just laugh off.  However, consider it just as important as giving your family history at a doctor's office.  Why does your doctor care what diseases your grandparents and parents have had?  Clearly, those diseases can continue to haunt families for generations.  Yet, just because your grandfather had a heart attack does not mean that you are destined to as well.  Just like you shouldn't be too proud to admit diseases in your family, don't try and cover up bad financial decisions of your parents.  That's all they are... your parents' decisions.  It will be up to both of you to determine how you let those decisions affect your future together.

Good luck and remember to just keep it on topic- no commentaries no matter how strange your future in-laws sound!

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