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Marrying your financial future

Are wedding bells in the air? If so, it’s important to devote some mental energy to financial matters – and this analysis can’t be limited to the bills associated with your wedding.

Are wedding bells in the air? If so, it’s important to devote some serious mental energy to financial matters – and this analysis can’t be limited to the bills associated with your wedding.

As a couple, you’ve got to think hard about the best way to merge your finances for years to come and keep potential squabbles to a minimum. This can be much, much easier said than done, of course.

The following tips can help.

1. Let the talking begin. Before you tie the knot, be completely up front with each other about how much money you earn, spend and owe. Be honest about any and all debts, child-support obligations, alimony payments, business loans and other key financial details.

2. Time your discussions carefully. Both before and after the wedding, pick good times to talk about money matters – not, for example, the instant you open up your credit-card statement or cell-phone bill. Take pains to communicate while you’re both feeling relaxed and emotions aren’t riding high.

3. Share both the good and the bad. In addition to adopting a policy of full disclosure when it comes to debts and other potentially challenging financial obligations, also keep your partner informed about events that affect your balance sheet in a positive way, such as bonuses, inheritances and other expected or unexpected windfalls.

4. Figure out where your money is going. Make a simple budget by monitoring your joint expenses for a few weeks or a month. Then you’ll be able to see how well you’re covering those expenses and where you realistically could limit spending. This exercise also can help you see how to set aside money for an emergency fund to buoy you through unexpected problems, such as the loss of a job, a medical crisis or a broken-down vehicle.

5. Recognize key patterns. The process of building your budget may open your eyes to serious differences in spending habits and attitudes toward money. This can be a huge source of contention – but it also can be an important opportunity for reflection. Are you unwittingly falling into the financial role you watched your mother or father play and feeling disappointed because your partner isn’t filling the role you expect of him or her?

6. Get used to tackling goals together. You’re a financial team now, and it’s important to act like one. No matter how big or small of a goal you set, whether it’s paying off debt or saving for an upcoming vacation, be determined to help each other reach it. As you succeed in achieving goals as a couple, you’ll feel even closer as a team.

7. Joint or separate accounts? While this is a highly personal decision, many financial advisers recommend that couples have joint accounts for pooled savings, investments and household expenses. Then each person may want to establish separate checking accounts for discretionary spending.

8. Reduce your liability. It could be smart to keep real estate and bank accounts in separate names if one of you is especially vulnerable to lawsuits, such as if one spouse is a doctor, lawyer or business owner.

9. Consider designating a money manager. If one of you is especially organized and has a gift for keeping the checkbook balanced, it may be wise for that person to take care of the household finances. Whoever does it should keep the other partner in the loop about bank balances and investment results.

10. Keep your cool – and keep trying. It’s much easier to fight about money than it is to discuss it rationally and handle it successfully. Resist getting stuck in recurring bad patterns; instead, continue trying to establish new, healthy ones.

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