Bank Advice to Couples

Recently, my bank, the UW Credit Union, published an article on the website about "Five Common Money Mistakes Made by Couples." Here is the list in short form:

1. Know where your money goes and have a budget.
2. Share financial responsibility.
3. Don't keep money secrets from each other.
4. Don't marry your debt.
5. Plan ahead.

The bank recommends using a budget worksheet, but I would argue in favor of budgeting software, or better yet, an online service like Mint.com. Mint is a great way to track expeditures, and any software package would pick out items you wouldn't think of putting on a budget. For example, you may have no idea how many times you actually stop for coffee on the way to work and how quickly that adds up. It's quite a bit, week after week!

The other points were great, if not somewhat obvious. Of course it's best to make decisions together and not retain secrets, unless of course, some money is set aside for a gift. Keeping major financial secrets is a quick way to lead to arguments or a lot of stress for a spouse should something happen to the other.

The fourth item about not "marrying your debt" pointed out that it's not best to merge debt. As many people have students loans, it may be tempting to put all the debt together. However, this can harm one or the other spouse's credit. Consolidation may save money on monthly payments, but it could make it harder to get a loan. It also reminds me of that commercial with the guy singing about his new wife who had a bad credit score and they couldn't get a home loan because of it. At the end, he sings something like, "I’d be a happy bachelor with a dog and a yard." That's no way to start a marriage!

The last point about planning ahead also noted that it's good to have about six months in savings ready for any disaster. While that sounds great, I don't think anyone in middle America is doing that. It's been said that we spend $1.01 for ever $1.00 we earn, so it's going to be difficult to change the culture to turn that around. Of course, it's best to try!