Wrangling Your Finances With Newlywed Money Management
Playing the money game as a team ups odds of a win, says Bills.com CEO
SAN MATEO, Calif., June 6, 2007 - June creates dozens of new household teams, with almost 10 percent of weddings taking place during the month -- but studies show that as many as 75 percent of couples argue about finances regularly. Andrew Housser, co-founder and co-CEO of free online consumer portal Bills.com (www.bills.com), suggests couples follow his company's playbook to train for financial harmony. "Every wedding drafts two people into a team," Housser said. "Money disagreements can make an end run around a solid partnership. But with some sound coaching, couples can play to win on the financial field." Housser's playbook includes the following suggestions:
- Pre-game conditioning. Before saying "I do," understand the background each partner brings to the marriage. Discuss whether you are savers or spenders; individual and mutual priorities; how parents and grandparents handled money; and expectations. Perhaps most importantly, understand your partner's actual financial situation. Discuss the nitty-gritty of salary, debt, assets, credit scores, child support or spousal support payments from previous relationships, and expectations in terms of returning to school, obtaining other employment, etc. Pre-marriage credit scores impact a couple's financial future, as do attitudes and habits about money.
- Play to strengths. There's no sense in dividing bill-paying duties evenly when one partner takes to money management like Tiger Woods to golf, and the other gets confused in the check-out line. "But always discuss major purchases, investments and financial problems with your partner," Housser suggests. Check in at least once a month to be sure both partners understand their mutual financial situation. Both partners should know where to find important papers and how to use the financial system. "Otherwise, divide money chores in any way that works for your team."
- K-O debt. Debt never helps. Know how much you owe, and make a plan to knock it out. Pay the most on highest-rate debt. When that's paid off, move to the next-highest-rate debt. Remember that this applies only to credit card (unsecured) debts. Always pay any secured debts (mortgage, car) first. (For more ideas on managing debt payoff, visit http://www.bills.com/pay-off-credit-card-debt/.) Once credit card debt has been knocked out, move on to car, student loan and mortgage debt, and to savings and investments.
- Play by the same rules. Make choices aligned with mutual values. Sit down together and come up with a list of combined top priorities. Then, plan how finances -- today and tomorrow -- can further those goals. "Focus more on how to achieve all your goals, and less on whose goals 'win' in the near term," Housser said.
- Know the numbers. Live with a budget. This is the secret to winning the game of money. Download a free guide that will help create a budget at http://www.bills.com/guide/.
- Leave space for a gut-check. Allow each person some freedom. "In life, always following a plan can result in frustration -- that's human nature," Housser said. "Whatever the budget, couples should plan for each person to have some money they can spend on anything they want, without coaching or criticism from their partner. Whether it's $5 a month or $500 depends on the budget -- but have fun with it."
- Update the game plan. Goals, dreams and priorities change throughout life's stages. At least every year or so, check in with each other. Even if the budget allows for only minimal additional debt payments, after a year or so you will see progress. Then, recalibrate the plan to work for the next year.
"With this type of planning, just about any couple can work together as a team," Housser said. "Planning how to use your money -- instead of letting your money run your life -- allows every team to move down the field of life toward their goals. And that's clearly a win-win situation, for you and for your marriage." Based in San Mateo, Calif., Bills.com is a free one-stop online portal where consumers can educate themselves about complex personal finance issues and comparison shop for products and services including credit cards, debt relief assistance, insurance, mortgages and other loans. The company blogs about consumer finance issues at http://www.bills.com/. Since 2002, Bills.com and its partner company, Freedom Financial Network, have served more than 15,000 customers nationwide while managing more than $350 million in consumer debt. The company's co-founders and CEOs, Andrew Housser and Brad Stroh, were named Northern California finalists in Ernst & Young's 2006 Entrepreneur of the Year Awards.