Eight Financial Tips For Newlyweds

Lea Goldman
Forbes.com

NEW YORK - Once the wedding bells have stopped ringing, even well-heeled newlyweds like Jessica Simpson and Nick Lachey need to be mindful of their finances. (Remember hubby Nick's horror about his wife's purchase of $1,400 bedsheets?) That's because, of the roughly 2.3 million U.S. couples that get married annually, the median age of first-timers to the altar is between 25 and 27, according to Divorce Magazine. At that age, many couples are still hitched to student loans and credit-card debt accumulated as singletons. "They live for the moment and don't think ahead," says Nancy Langdon Jones, a certified financial planner in Upland, Calif. "For many couples, this period in their lives has the greatest impact on what will happen in their future."

Revelations about debt, income and bad spending habits can wreak havoc on a new marriage. Pros like Stewart H. Welch III, author of the 10 Minute Guide to Personal Finance for Newlyweds, advise couples to come clean well before they stroll down the aisle. Unromantic as it sounds, couples should itemize on paper assets like checking and savings accounts, 401(k)s, stock or bond investments, real estate, jewelry and other valuable collectibles in their portfolios. Also share information about liabilities, including credit-card balances, personal or car loans outstanding--even owed income taxes. That kind of disclosure will not only help determine the wedding and honeymoon budget, but also prevent any post-wedding whammies. "Remember, if you're buying a house and applying for a mortgage, the banks will run a credit check on both of you. One spouse's bad credit will have a negative impact on the loan," warns Welch.

It's never too soon for serious couples to sit down and define their financial goals, be it home ownership, a cushy nest egg or early retirement. Craft a realistic budget in order to determine how much income can be deferred to savings. Schedule time with a financial planner for guidance on investment options, like CDs and money market accounts. Even mundane decisions, such as who will pay the bills or whether to have a joint bank account, should be settled in advance. Consider a joint checking account to pay for joint expenses, like rent, utilities and mortgage payments, says Michele Steinberg, a financial planner and co-founder of FinanceGrrl, a Los Angeles financial counseling network aimed at twenty- and thirty-somethings. She says it's OK to maintain individual checking accounts as well. "Everybody likes to have some personal control," she says. "I tell couples that the personal checking accounts pay for each other's gifts."

The strategies advocated by Steinberg and others are as applicable to straight couples as they are to gays--with one big exception. Because U.S. tax laws have yet to catch up with marriage laws, gay couples still have to file separate tax statements. They also need to plan more carefully for the future: Retirement accounts may not recognize a surviving gay spouse as a beneficiary.

The Web sites of Citibank, a unit of Citigroup (nyse: C - news - people ), and Wells Fargo (nyse: WFC - news - people ) also offer ample financial planning checklists and primers, from credit-card consolidation to home-buying tips. Skip the movie theater, and make date night a trip to Barnes & Noble (nyse: BKS - news - people ), which boasts shelves of books devoted to financial planning for married couples.

The experts strongly advise newlyweds to prioritize debt payment concurrent with building an emergency fund, or what Welch calls a "Power Account." How much to stow away? At least three months' worth of expenses should cushion in the event of an unanticipated crisis, like a layoff. Building that SOS nest egg isn't easy. Try reducing household expenses by 10% by buying generics, conserving energy and cutting back on costly meals out. Then commit that savings to an interest-bearing account and mutual funds. Set up a direct-deposit system so as to avoid the temptation of spending the extra cash.


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