Planning Your Finances

Finding a couple whose ideas on finances are the same is uncommon. One relies on credit cards and one relies strictly on cash. One has their checkbook balanced down to the penny; the other has no clue how much money is in the bank til the statements comes in. One of you lives to spend; the other fears a rainy day.

Such differences in finances are normal because they differ from one family background to the other. Models in spending and saving are also due to habit. We handle our money in a certain way because we have always done so and don’t realize there could be better ways.

Reasonable couples can come to an agreement on the minor differences between them. Then to balance the attitudes they have about how to handle their finances, as well as their checkbooks. In the process of setting up a household budget and estimating income and expenses, you will certainly talk about each other’s financial responsibilities and commitments and determine what tools you will need; including checking and savings accounts, credit cards, insurance, wills, etc. to manage this partnership.

For many, an evening or two devoted to this subject should be plenty to get your affairs combined and in order. If one or both of you are using financial planning services or an accountant, you may want to verify any decisions you make with him or her before actually changing names, opening new accounts, and so on. Also, keep in mind the different tasks a professional can help you accomplish. Some of these include:

· Prepare a budget and organize cash flow;

· Merge debt and construct a reduction plan;

· Prepare for income taxes and set up a system of record keeping;

· Plan ahead for major purchases such as home, care, education;

· Set long-term goals and set up a savings/investment program;

· Calculate your assets including insurance policies, profit-sharing/retirement plans, stocks, trust funds, etc.;

· Form a emergency plan in the event that income is increased or eliminated;

· Create an estate plan or will.

Some couples may find a financial discussion uncomfortable or even difficult to have. Even so, certain conditions clearly signal that expert financial advice is needed:

· If either person is bringing significant debt to the marriage;

· If either has had significant credit difficulties;

· If either has experienced tax problems, has past-due tax bills, or has failed to file past returns;

· If either party is clearly unwilling to make a full and complete financial disclosure to the other.

Such responsibilities, both fiscal and psychological, can threaten the foundation of your partnership; hold back your growth as a family, and jeopardize your achieving future goals many years from now. Finally, and not before I forget, under many state and federal laws, the innocent partner can be held responsible for the financial decisions and mishaps of the offender from the moment the marriage takes place.

Financial planning is a process, not a product. The professional, or even the two of you, can help to distinguish goals, understand where you are, and determine what strategies you need in order to achieve these goals.