Here are some thoughts on money and marriage for newlyweds courtesy of ARA Content:
Engaged couples know how much time and effort are involved in getting everything just right for the big day. But sometimes planning a wedding can overshadow planning for your financial future together. For many couples, the honeymoon period can quickly come to end when they discover that they hold different views on how to manage their finances.
Disagreements over money matters cause more friction in marriages than just about any other topic. That’s no surprise considering that in a March 2006 USA Today/CNN/Gallup poll, nearly two-thirds of married couples said they talked little or not at all before the wedding about how to combine their finances. Here are some tips on how to discuss money issues before (and after) the wedding:
Take Stock
The first step is to understand where your finances are today. Each person should obtain a free copy of their credit report at www.annualcreditreport.com and order a FICO score, the score most widely used by lenders, from Equifax. This information can be helpful in creating a combined family balance sheet that lists the assets and liabilities of both individuals. Your credit score provides you a better understanding of how creditors view you. Together, these two items offer a good starting point for discussing differences in your approach to managing and spending money.
Share Your Dreams
As you review your finances, use this time to talk about your short and long-term priorities as a couple: where you want to live, the type of house you want, whether or when you want to start a family, even how you’d like to spend your retirement. It’s easy to get caught up in day-to-day details of financial management and forget that money is a vehicle for helping us achieve what we really want out of life. Focusing on some key goals as a couple provides added motivation for improving financial habits.
Getting from Here to There
Now it’s time to put a plan in place. If you discover that there are financial issues you need to address, decide how you plan to deal with them. For example, if one person has a large amount of outstanding debt, your first priority should be figuring out how to pay it off. Robin Holland, senior vice president for consumer affairs at Equifax offers this advice: “The smartest way to pay down debt is to target the balances that carry the highest interest rate first. When that one is paid off, move on to the one with the next highest rate. Keep in mind that as you do this, it is important to continue paying all your bills on time, even as you work to reduce debt on specific loans.”
As you get closer to making your first big purchase together, such as a car or a house, you should monitor your credit scores closely. Score Watch delivers continuous score monitoring and notification when a change in your FICO score impacts the interest rate you are likely to receive. Score Watch makes it easy to target your ideal score, see interest rates you are likely to receive and watch your score trend over time. You will be glad you worked together to create a better future for your family.
To learn more about managing your credit, visit www.equifax.com.
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