Heart-to-heart talks give marriage fiscal and emotional strength
New relationships are wonderful and challenging. Here is a continuation of a past column to newlyweds on how to handle financial issues and avoid financial crisis.
As soon as you can, establish tax-advantaged savings plans. Retirement may seem a long way off, but the magic of compound interest shows how dramatically your money will grow if you start soon and stick to your plan. Less than $40 a month will put $2,000 into an individual retirement account.
Can you each contribute $25, $50 or $100 to a retirement account?
Establish credit before you need it. Young couples can be denied credit when they are ready to buy a home. They may know they are responsible, but if they have no credit history, a lender has limited information on which to grant them credit.
One of the best ways to establish credit is to open a savings account and then obtain a secured credit card linked to your savings. After you prove you are a responsible borrower (usually 12 to 18 months), your savings will no longer be tied to your credit. Your credit card becomes an unsecured card and you can use or move your savings.
When you shop for a secured card, you’ll want to compare annual fees, monthly interest charges and interest earned on your savings.
Use credit thoughtfully. Decide now how you and your spouse want to use credit.
– Plan to use credit cards for bookkeeping advantages and not as an ongoing loan.
– Pay off your credit cards each month.
– Find a credit card that will give you additional benefits, such as frequent flyer miles or a discount on an automobile, if the extra benefits are important to you.
For most of us, a loan is necessary for large purchases such as automobiles and a home. Always practice the rule of three – shop at least three places for your purchase AND shop at least three places for credit.
Think first about saving for what you want. You’ll pay less and save for a shorter period of time compared to using credit.
If you find you can’t pay, don’t delay. If you begin to experience difficulties handling your money, do not wait another minute. Everyone finds times when problems arise. Contact Laurel Kubin at the CSU Cooperative Extension Office (498-6000) for help designing a debt repayment plan. You can also contact the Consumer Credit Counseling Service, or CCCS, of Northern Colorado and Southeast Wyoming at 229-0695.
Make time for heart-to-heart discussions. As you grow in your marriage, you’ll discover how often money is attached to things you’d never dream would be related. The real issues may be love, freedom, control, competency and so on, while money is the topic being discussed.
Be real, be honest, address your own personal issues, appreciate your spouse’s differences and think about what you learned about money when you were growing up. What do you remember about money when you were growing up? How did your parents feel about money? How do you think money relates to your most deeply held emotional issues in life?
Sharing your feelings with a good heart-to-heart talk gives your marriage the strength to get better and better. Always remember to respect and appreciate each other.
– 30 –
Judy McKenna, Ph.D., CFP, Family Economics Specialist, Colorado State University Cooperative Extension, firstname.lastname@example.org