P.E.C.K. your way to financial health, a newlywed’s guide

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It’s Spring; wedding season is upon us!  Weddings usually bring happy thoughts of holding hands and romance and new lives.  But, that is only a small percentage of what actually goes into being married.  The majority of marriage is grunt work, not romance.  One of the touchiest parts of being married is money – who earns it, what it means, where it’s kept, when it’s saved and how it’s spent.

Money is a subject that will continue throughout your whole marriage.  Before you get married, you most definitely want to talk money.  It does not get easier to broach once you’re hitched.  It is just good common sense to know about your intended’s money language, money comprehension and money fitness.  It’s hard to do but if the tough questions can’t or won’t be answered, then you may have a much larger problem on your hands.  I have heard people say that feels too awkward or out of bounds or threatening and sometimes even shameful to talk about money.  But, it is simply imperative to your marriage’s health to ask each other hard questions and answer honestly.  You will need to keep the money dialogue going without ridicule or eye rolling!  We all grew up differently and need, expect and want different things from money.  So, let’s talk about it.

There are so many different aspects of marriage money that we’ve put together a series of questions for the bride and groom to be.  We are calling it PECK, as in: Practical, Emotional, Contractual and Kids marriage questions that every couple needs to discuss before marriage.  It might even save you from making a disastrous decision.  Today we are tackling the P, as in Practical questions, you need to ask each other. We’ll cover the Emotional, Contractual and Kids aspects of the PECK program on consecutive Mondays here on this blog.

We begin with the nine most bare bones, practical questions you need to know about each other prior to tying the knot.

1)      What is your income?

You must understand both your own and your intended’s yearly gross income and monthly net income.  In addition, is there other ancillary income that comes in quarterly or yearly and/or do either of you have additional income streams?  For instance, stock dividends that are paid directly, bonuses, mailbox money from intellectual property, or a big Christmas check from Grandma?

2)      What is your debt?

Student loans, credit cards, mortgages, child support, settlement, alimony, paying back Mom & Dad, whatever money debt you owe? To anyone?  Even that $300 you owe your brother for accidentally tossing his cell into the pool.  All of your debt.  Note: student loans rarely ever forgiven, even in cases of bankruptcy.

3)      What is your credit score?

This may not seem like a big deal now, but it will be important to know when you want to purchase a new car or a house.  In addition, it is something that can be worked on; repaired and made more attractive to a lender and the sooner you know you need to repair it, the better! Make sure you understand both your credit score and your spouse’s prior to getting married.

4)      What is your net worth?

If you haven’t already done it, take a look at our blog on net worth.  It will help you figure out what you’ve got and give you a good idea of where you would like to be as a couple.

5)      What is your risk tolerance?

If you are unaware of your financial risk tolerance score, please give us, Winch Financial, a call to schedule a meeting to help figure out where you sit on the risk tolerance continuum. Your risk tolerance score acts as a road map for the financial decisions you make. It is good to know for a multitude of reasons that we will go into in the next PECK series.

6)      What are your expenses?

By this I mean, your base line expenses that keep a roof over your head, a phone to call home and food in your pantry.

7)      What does your budget look like?
If you have not created a budget, please do so.  It will help give you a better idea of what you need to keep yourself on top of your bills and out of debt.  It is an eye opener and a great way to have a dialogue on what you will need to keep in mind as expenditure.

8)      Who will be paying the bills?

Are you planning on paying the bills separately?  Will you split them down the middle?  Either way, you will need to know who will actually be writing the check or doing an online payment.  It is also a good way to figure out …

9)      Will you have a joint account?

It is not necessary to share a bank account, but it is necessary to discuss your banking strategies. Some couples open a joint account upon tying the knot; others prefer to keep their accounts separate. It is entirely up to you, but you need to make this decision before you begin to pay your marriage bills.

Stay tuned for next week’s edition of PECK, in which we discuss the Emotional aspect to marital money.