We're headed to 1998 for today's throwback. I was 11 back then, most likely waiting to hear the final bell ring at Lovett Elementary. Nancy, however, was looking forward to hearing different set of bells: wedding bells!
Our theme this week has been communicating with your significant other about finances. Nancy's column in the Mississippi Business Journal in February of '98 shares her advice on the topic. Enjoy!
I've changed my byline. After almost seven years as a widow, I've decided to take the plunge again. It sure is different this time around. The last time I did this I was 19 years old. I'm 39 now, and things seem to be more complicated.
Experts tell us there are two subjects that often trip up married couples. Both are incredibly intimate, and our views on each are shaped from birth. One of these subjects is money. So, why would you enter into marriage without some understanding about how your intended manages money and how you'll manage money as a couple? Maybe, it's because money is such a personal topic.
A guy once told me that when a woman wants to be intimate, she tells you about her feelings. But when a man wants to be intimate, he tells you how much money he makes. It's one thing to let someone into your heart. It's quite another to let them into your checkbook. Think about it... letting someone see your pay stub, your tax return, your bank statements, your credit card statements. Those things speak volumes of us. They tell about our achievements and failures. They tell of our excesses and pettiness. They tell about our very character. Laying that out for another person to see is a scary thing.
But our marital relationship should be the most intimate of all our relationships. If you can't share this information with your love, you probably don't need to share your life with him. Notice, I said share information. I didn't say share bank accounts.
The first time I married, we set up joint accounts for everything. We managed all our money together. After all, half of nothing is still nothing. Now, I have my own set of assets. Some of these came from my first husband's estate, and I want to pass these on to my daughter. What to do?
Legally, the best thing to do is keep all individual assets out of joint accounts. If you ever transfer money into a joint account, they become part of marital property and can be considered for division in case of a divorce. I know. I know. Who's thinking about divorce when you're starry-eyed and in love? Tell that to my client who put stock given to her by her grandmother into a joint brokerage account. When she divorced, her husband got half of the gifted stock. Assets that you bring into the marriage and inherited assets should remain outside of marital property.
Practically, that's not always possible. After all, the two of you have mutual goals... a new house, a trip, etc. Tap into your individual accounts as needed to reach these goals. When you marry, use joint accounts to build assets together. Try to start these accounts from scratch.
And what about your attitudes about money? You may be a penny pincher, while your spouse may be spending it like water. You may be allergic to debt, while your spouse steadily piles up credit card bills. You may believe in putting aside something for a rainy day, while your spouse lives only for the moment. You better find this out before the "I dos." Compromise is the key word here, but make some decisions before the wedding about how you'll manage your finances as a couple.
Decide how the bills will be paid and who will pay them. In every couple, there is one person better at money management. Let that person take the lead, but don't let them take over. Keep each other informed about the finances. Make decisions together. Decide on your goals... that new house or a comfortable retirement and make plans to get there. If you use a financial advisor, you should both meet with this person.
Through the years, I have come to understand the power of money. When I was married the first time, my husband was the prime breadwinner. At times, I stayed home and took care of our family and home. I often felt powerless because I was not earning money. My husband did not begrudge my spending, but I often felt I should ask permission before making a purchase. I needed some money that was my own, and I hear that many times from women. We feel empowered when we have an account of our own. Guys, don't take it personally if your wife needs this.
I'm convinced that both men and women need to have some separate money. Don't make it a secret, though. Make this something that gives you the freedom to do something nice for yourself. And don't sacrifice your goals as a couple just tot feed your own desires. It's a balancing act.
I meet with many couples, and each manages their money differently. There is no definite formula for what works. What works is what works for you and your spouse. But, first, talk about these issues. As you prepare for marriage, be ready to pull out those account statements and say, "I'll show you mine, if you'll show me yours."
--Nancy Lottridge Anderson, Mississippi Business Journal, February 16, 1998
And, here's a list of stocks that happened to be on the same page as her article (in case you're interested).