Step by step guide to get our future married house in order?
January 16, 2014 7:51 AM   Subscribe

We're getting hitched! Yay! I freak out about money, and I freak out that my fiancé doesn't freak out about money as much as I freak out. Is there a good step-by-step guide you'd recommend that we can go through together to make sure we're covering all of our bases for saving for retirement, saving for other stuff, and paying down debt?
posted by ashtabula to opelika to Work & Money (12 answers total) 21 users marked this as a favorite
I recommend that you both go to Financial Peace University. You can do it at a church (I know, I know, but as gaggy as the packaging is, the information is solid.) You can also do it on-line. By attending together, you can discuss your goals and concrete steps for making them happen.

Most marriages show their weakness around money. By talking about it, and having a plan you both buy into, you can avoid that.

posted by Ruthless Bunny at 7:55 AM on January 16, 2014

Depends on what will help get your fiance on board, but you could consider visiting a financial planner. They give you forms to fill out that will put everything out in numbers in front of you - household budget including bills, maintenance, groceries etc; car expenses, taxes, savings, vacation, debt, retirement, pets... having it written out into a monthly plan might help equalize the financial freaking out into a shared plan. Ask around for a financial planner referral in your area, and interview a few people before choosing.
posted by St. Peepsburg at 7:58 AM on January 16, 2014

You need objectivity for this, so i would recommend a financial planner. If you want them for a one-off consultation, find one who charges by the hour and pay for an hour or two. (If you want one for the rest of your lives, you need to do more research. But start with this.)

Then you need the facts: gather pay stubs, credit card bills, and tax returns.

Last, you need to cover the emotional side of this, which is probably the hardest. I know very few people who are really comfortable talking about money, or who have thought much about money and priorities.

TOGETHER, go through a few months worth of bank statements and credit card bills and rough out what your combined expenditures look like. Then look at the pay stubs and do the same for your income. Comparing these two is a first step toward what your budget looks like, and then you can figure out how much to save for retirement, spend at the coffee shop, etc. You will need that stuff for a meeting with the financial planner not to be an expensive waste of time. Then again, if you do all that, you may do a lot of the FP's work for them! :7)
posted by wenestvedt at 8:00 AM on January 16, 2014 [2 favorites]

Reddit /r/personalfinance FAQ

YNAB is awesome for getting both of you involved in your finances and budgeting (as well as alleviating freak-outs because you know exactly where every dollar of your money is going).

Generally, you want to set up, in order:
Retirement funds up to employer match
6 months emergency fund
Pay down debt in order of APR
Retirement funds to max
Savings for large purchases (vacations, house, kids' education)
Other taxable investment accounts
posted by melissasaurus at 8:10 AM on January 16, 2014 [1 favorite]

I cannot recommend YNAB enough for this. My wife and I use it and it's absolutely great. I've been budget-averse for all my life for various reasons, but YNAB treats budgets differently. It really does feel like magic.

We have categories for retirement savings, car replacement, debt elimination, and everything else under the sun. We have never had even so much as a disagreement about money. When something comes up, we open YNAB, take a look, and then make a decision together.
posted by Sternmeyer at 8:11 AM on January 16, 2014

Although it's customary for married people to merge their finances, it's not mandatory. I've seen relationships crash'n'burn over different fiscal attitudes. Consider keeping your finances separate until you work out a compromise on how to harmonize the freaking out vs non-freaking out.
posted by Jesse the K at 8:13 AM on January 16, 2014 [1 favorite]

My fiancée and I have the same fiscal priorities, but I'm not as good at keeping track of it as she is, and my tendency is to round to the nearest dollar and not track every penny. This means that her credit is perfect and mine is less so, because I regularly ran over before we merged things.

Two things that have worked for us (your mileage may vary):
- Have joint things, but have things that are under your own personal name as well.
- Designate one person to be the "CFO" in the relationship. (The other person gets to be the CEO or COO.) That person is responsible for collecting all money centrally, paying bills, and doling out allowances into debit card/cash accounts. Each person lives off of their allowance for normal expenses like gas and meals out. Joint expenditures (e.g. house renovations) get discussed before they get spent.
posted by SpecialK at 8:25 AM on January 16, 2014 [2 favorites]

You and your fiance might like to read through A Practical Wedding's Money and Marriage section. Like this one on marriage as mini-socialism.
posted by fontophilic at 8:33 AM on January 16, 2014

Financial Planner. I joke that mine functions as a marriage counselor at almost every meeting, because I freak out about money too while my SO is basically keeping Starbucks afloat. I would add two caveats however:1) They will try to sell you life insurance. At first I was very against it, but with two little kids the idea that they will be set if we are in a horrendous car wreck is somewhat comforting. And it's pretty cheap..., 2) Find one that can do taxes too. This created a LARGE PROBLEM one year - our finances were great but we got a huge surprise one year and it sucked big time. He "knew it was coming but thought it would be next year" yeah. Don't get me wrong it has been well worth the single digit percentage of our annual income we pay, and we now have a healthy retirement building and no credit card debt. I tried the online research option but it was taking a lot of time and I was the only one interested in it.
posted by Big_B at 9:22 AM on January 16, 2014

When we first got married, I had seen Suze Orman on Oprah in some waiting room TV and she suggested that you create multiple bank accounts. A combined spending account for "family" expenses, a combined savings account for "family" savings (we put money for our wedding here at first), and then two separate spending accounts - one for each of you. These separate spending accounts was important.

When we first got married, we also followed her ratio rule - he made 60% of the income and I made 40% of the income, so we added up our bills and he would put 60% of that amount from his income into the "family" expenses and I would put 40% of the amount from my income into the "family" expenses, we each put a pre-determined amount into our "family" savings account, and we got to keep the rest for our own spending. We each maxed out our 401k contributions that our employers matched (6%). We also set as many of our shared bills to auto-pay as we could, so no argument over who sent what check when.

This worked really well for us as, if one person got a raise, we'd readjust the ratios and keep going. He could also spend as much of his spending money as he wanted on golf or beer or video games and I could spend as much of my spending money as I wanted on beer or shoes or music and neither would worry about the other's spending because our shared bills were paid for.

This also worked well for us because we were both old enough that we had careers and were independent adults before meeting.

This has changed, now, though. After years of the above scenario - which helped us trust each other financially and feel comfortable enough with our bill-paying - that now we have a baby and shared big-purchase dreams (bigger boat!), we changed how we distribute the money, but have kept the separate accounts. Now, we each get a nominal amount of spending cash from our incomes ($200 a month each - but this is negotiable) and put the rest of our income in our shared spending and savings accounts with no more ratio changing. If someone needs more spending money a month (I had to dress up more at my job), we talked about it and I got a boost for a while.

The big kicker for us was the separate spending accounts so we didn't have to fight over who spent how much on what. The ratios really helped us trust each other financially, too.
posted by jillithd at 9:56 AM on January 16, 2014 [9 favorites]

I forget the source (MeFi probably!) but someone said that picking a spouse is like selecting a partner to run a very small non-profit organization.

I believe that they were talking about how the need to share all the work & expense among just you two can become very taxing emotionally -- but it's true in the narrower financial sense, too. Your "organization" will only stay afloat as long as you put money into it, and as long as you manage that money carefully. Money is easier with a plan and some stated goals -- just like a .org.

Our Catholic pre-Cana (wedding preparation) class touched on this, but not nearly as much as it should have. We are still working out our different feelings about and attitudes toward money after almost 20 years! :7) So my compliments to you on trying to defuse this big emotional landmine before the wedding arrives and passes and then you have to do those first months' bills together.
posted by wenestvedt at 10:21 AM on January 16, 2014

It's a small thing, but I would make an allowance for some separate spending money from the start.

Whether you have one income or four, everyone should have some latitude to grab a coffee or magazine or iPhone app or whatever, as long as it is within your budget.

This also allows some privacy for shopping ahead of birthdays/holidays/anniversaries, which totally-pooled money does not.
posted by wenestvedt at 10:25 AM on January 16, 2014

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