Saying I DoMonday, June 30, 2008

The wedding season is upon us and while all engaged couples dream of marital bliss, money is often the number one topic of conflict in marriage and a leading cause for divorce. Consumer Credit Counseling Service (CCCS) of Greater Atlanta, Inc. suggests that as couples mull over which fine china to select, where to honeymoon or even where to live, they also talk about their current financial situation, future financial goals, and attitudes toward spending and saving.

“Financial problems can cause irreparable damage to even the most compatible relationships,” said Mechel Glass, director of education for CCCS of Greater Atlanta. “Open and honest communication before you walk down the aisle can identify areas of concern and build a foundation for financial success.”

CCCS provides the following tips for engaged couples to ensure that the marriage can start on financially strong footing.

Calculate your net worth individually and as a couple. Share information about full-, part-time or supplemental income, monthly expenses, and existing loan and credit card debt. For better or worse, you inherit all of your fiance’s finance issues – the good, the bad and the ugly.

Map out short- and long-term financial goals – including preferred living standards. Does your future spouse have a desire to retire in his/her 50s? Or does she/he want a second house on the beach? What about retirement savings plans, insurance policies, life insurance plans or investment accounts? Are either you or your fianc’e on a strict budget to pay back the debt you’ve accumulated? It is important to talk now about long-term goals and any necessary short-term sacrifices.

Develop a plan to reduce debt redundancies and to pay down debts. Identify areas where bills unnecessarily overlap and look for opportunities to use your married status to decrease expenses. Most cellular phone companies offer family plans that can cut monthly phone costs, and if you are paying individual membership dues to a gym or other club, see if a family membership makes better financial sense. Use your savings to reduce credit card debt. Carrying significant debt into your marriage can affect the rates you might qualify for when applying for a mortgage.

Create a comprehensive budget. Take into account current income and expenses. While income generally increases with a marriage, oftentimes expenses increase too. Take a realistic look at what your new monthly expenses will be as a married couple. Keep in mind that certain bills will increase such as groceries, commuting costs and even dry-cleaning expenses. Be sure to plan the amount of money you plan to place into savings each month to create a joint emergency fund, to save for a down payment on a house, or even to build a joint retirement nest egg. Consider setting aside a small amount of money per week that each spouse can spend at his or her discretion.

Share your credit reports and credit scores. For many couples, marriage signifies the impending desire to purchase a new home or make other major purchases. But it is crucial to know about your fiance’s credit report. Americans are entitled to a free credit report from each of the three credit reporting agencies every 12 months. Log onto www.annualcreditreport.com to obtain copies of your reports and consider purchasing your credit score (for a nominal fee). In the process, carefully review the reports and correct any erroneous listings. Be sure to examine both of your credit scores and debt-to-income ratios since lenders use this information when assessing loan applications.

Decide when to merge accounts. Discuss on the pros and cons of maintaining separate or joint accounts. If your intended has bad credit, maintain separate accounts for the time being, but work with him or her to pay down the debt and begin the process of improving the credit score. If you both have good credit, consider opening joint accounts for household expenses and savings, but possibly maintaining a separate account for personal spending money.

Plan the wedding of your dreams – and of your financial means. Now that you are headed on the right path to financial bliss, be sure that the happiest day of you life does not become the one that ruined your finances and credit rating for years to come. Set a budget prior to planning the wedding and stick to it! There are lots of convenient ways to cut costs and still have a beautiful wedding.

Talk about the future. Discuss your plans for the future and how it can impact your finances. If you are planning to have children, talk about the expectations of what happens when the baby comes. Will one of you stay home to care for the child? Will you both continue to work and need to consider daycare options? How about college? The cost of raising children is significant and can have an impact on the most prepared family.

Interested in having the financial talk, but not sure where to start or how to create a budget for two? Consumer Credit Counseling Service has certified credit counselors who can help examine your current finances and plan for a life of wedded and financial bliss for years to come. CCCS is a nonprofit, community-based organization and a member of the National Foundation for Credit CounselingR (NFCC). For more information, call 800.251.2227 or visit us online at www.CredAbility.org.