Managing The Money
Copyright (c) 2002 Susan S. Levine, All Rights Reserved
What are your individual styles of managing money? Are you a careful, organized manager who prefers to save rather than spend? How closely does your partner's methods for handling money match yours? Does the way he/she takes care of financial matters drive you up a wall?
Although money should never be the only consideration in deciding to marry, you also need to be aware of the dynamics involved. Arguments over money have caused many a couple to end up in divorce court. You want to make sure that you and your partner can work out a system of paying bills and tracking other expenses to keep your home running smoothly.
Credit Cards
If you or your partner has a tendency to go for the plastic every time a purchase is made, the result is going to be a large amount of debt. And it may have occurred already, without your knowledge. Credit cards are one of the leading causes of debt in America. Therefore, you might want to take some of the following steps, if you just got your first MasterCard or VISA, to prevent yourself from falling into that deep hole.
1. Use that ONE card for any credit purchases
2. Say no to all store credit cards, no matter how many "benefits" they offer, or how "prestigious" the store is. If a store won't take your credit/debit card or your cash, take your business elsewhere.
3. Instruct the issuing bank or financial services company NOT to raise your credit limit. Keeping your spending limit low, at around $2500-$3000, will prevent "maxing out" your card at high levels. It will keep your minimum payments lower on average too.
4. Remember that American Express is a CHARGE card, not a credit card. Charge cards require that customers pay the entire balance each month.
5. To build up a good credit rating with your new or slightly used card, make just one purchase per month. Keep the transaction small, between $10 and $50. This allows you to pay the entire balance when you receive your bill. Do this for as long as you can, since it gets you brownie points with the bank.
6. Before taking out the card, ask yourself whether your purchase is a need or a want. If it's just a want, chances are you really don't need it.
7. If or when you do "max out" your card, PUT IT AWAY! Make all your payments in cash or by check for a few months, until you have managed to pay off a good portion of the debt. Do NOT take out another card.
These tips aren't a guarantee you'll stay debt-free for a lifetime, but they can help. And you don't have to be a financial expert to follow them.
Financial Philosphies
The following are fictitious money dilemmas that couples may have before marriage. Look at each one, and ask yourself and your partner what your individual feelings are. The names are fictitious as well.
Scenario #1
Arthur and Andrea are planning to get married within the year. Before the wedding takes place, Arthur receives a significant and unexpected windfall of $75,000. They both agree to purchase a home, but Arthur tells Andrea that since the money is his, so is the investment on the home. He will not put her name on the deed, citing that if the marriage doesn't work out, she will not be able to put any claim on it. If you were Andrea, would you still marry Arthur?
Scenario #2
Bob and Becky agree that they want to raise a family of two children. Becky intends to go back to work after the kids are in school, but Bob insists she be a stay-home wife and mom after the first child arrives. Becky says she could agree to that, if Bob will help her out financially, so she can run her own home business. Bob refuses, saying she only needs to do her "job" as a wife and mother, and that she doesn't need additional funds.
Bob's refusal to accept a compromise on this issue would mean Becky would be entirely dependent upon him for any money for herself and the children. Is marriage to a money controller what you would want?
Scenario #3
Clarence has a thriving successful business, a son from a previous marriage, and a substantial bank account with seven figures. Claire has worked in a series of low-paying jobs, and is excited by the prospect of marrying a wealthy man. She and Clarence have been dating only a few months, but he asked her to marry him anyway. Shortly before the wedding, Clarence tells her that he has set up a large trust account for his son when he turns 21. He has made a will giving his son the majority of his estate should Clarence die unexpectedly. He has also asked his attorney to draw up a prenup which would give Claire a generous settlement in the event of a divorce, but nothing beyond that.
Claire, hearing of this, is furious at being asked to sign the document, despite the fact it would hardly leave her penniless. She had set her sights much higher. Her rage strikes Clarence as out of control and makes him suddenly uneasy. Without explanation, he calls off the wedding and ends their relationship.
Given her violent response to a reasonable request, do you believe Clarence was being paranoid, or simply prudent?
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