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Frequently asked questions about marriage

How can a newly married couple stop fighting about money?
There are two general approaches that most couples use when it comes to money. Either the couples split the bills, sometimes based on income, or they put all the money together and one person pays the bills. I recommend that a couple first discuss their finances and set goals they wish to accomplish. Second, create a realistic budget. If it's needed, track your expenses for a month or more and use it to develop a practical budget. Third, work the budget together and make sure that you both agree before the beginning of each month how the money is to be spent. Fourth, it's best if each person have some spending money, but of course this will depend on how tight the budget is. Finally, don't forget about the important financial issues, such as life and disability insurance, retirement savings, etc.

What is a shared management system?
A shared management system in marriage can teach a couple how to share money. This can bring a couple together or tear them apart depending on whether they learn how to be responsible together. A shared management system is an income management system in which (1) both incomes are deposited in a joint account, (2) both partners have equal access to this account, (3) both partners assume responsibility for managing the account, (4) household expenditures are randomly managed by either spouse. (Source: "For Love and Money" by Dr. Bernard Poduska, 1995)

What are the 10 financial principles to live by?
In a book titled, "For Love and Money" Dr. Bernard Poduska offered ten principles that can help couples deal with their finances. These principles will help you develop good patterns for a healthy financial future.

1) Financial problems are usually behavioral problems rather than money problems.
2) If you continue doing what you have been doing, you will continue getting what you have been getting.
3) Nothing (no thing) is worth risking the marital relationship for.
4) Money spent on things you value usually leads to a feeling of satisfaction and accomplishment. Money spent on things you do not value usually leads to a feeling of frustration and futility.
5) We know the price of everything and the value of nothing.
6) You can never get enough of what you don´t need, because what you don´t need can never satisfy you.
7) Financial freedom is more often the result of decreased spending than of increased income.
8) Be grateful for what you have.
9) The best things in life are free.
10)The value of an individual should never be equated with the individual´s net worth.

Is it a good idea for couples to track their expenses together?
Someone once said that finances was one of the top three causes for divorce. Whether this is true or not, finances and the management, or lack of management, in a marriage can be destructive. Couples who work together on finances traditionally have a better marriage. Furthermore, couples who team up to solve financial woes bond in ways that couples with lots of money don´t understand. Take time to plan your finances together, it can save you a lot of marital discord.

How much should I spend on an engagement ring?
There used to be a theory that a man should spend one to two month's salary on an engagement ring for his fiancé. So if you were to make $1,000 each month, then you would spend between $1,000 and $2,000 on an engagement ring. Nowadays, that theory is not necessarily adhered to any longer.

When looking at how much to spend on an engagement ring you need to look at how much you can really afford. Are you able to finance the ring? Do you want to make monthly payments or do you want to pay the ring off all at once? These things will all factor into how much you should spend on your engagement ring. Go shopping, get some ideas, and check out prices so that you know what you are in for.

Finally, you need to consider your intended bride and what her expectations may be. It's an important purchase that she will wear for the rest of her life, so you want her to be happy, while at the same time being somewhat practical about the purchase.

What will be the biggest wedding expense?
Your reception, including the food and beverages, can average 50-65% of your total budget. Therefore, the reception location you select and how many guests you invite will have the most impact on your budget.

Should my fiance and I create a separate checking account for our wedding?
Setting up a separate checking account with a budgeted amount of money works for many couples. Just be sure to pay all of your bills, deposits, and track all of your expenses out of THAT account or it ends up being a nightmare and defeating the entire purpose. After the wedding consider keeping it as a joint checking account - maybe for a travel fund or rainy day fund. If you are very disciplined with your credit, you may also want to designate a separate credit card for wedding expenses (but we really don't recommend paying for your wedding using credit cards if at all possible).

How can I ask for money instead of a gift?
Actually, there is NO way of wording the asking of money for wedding gifts in lieu of something else without being tacky. I'm afraid this is a cardinal rule of etiquette that must be taken seriously.

The only thing you can do is tell your friends and relatives your preference. Then, when others ask, your family and friends can say that you would prefer money because you are ... (i.e. saving for a house, etc.).

Then, guests can do whatever they like. If they take the hint - GREAT - but if they don't, accept the gift with a gracious thank you!

How can I budet for a wedding?
In today´s society...the "ize" have it. We must prioritize, compromise and sacrifice to have a successful event that doesn´t break the bank. Afterall, you want to remember your wedding as a source of joy, not of debt.

1) Find out who will be paying for your wedding and how much they can afford. You should establish your "bottom-line" first.

2) The next step is to fill in a sample budget with "guess-timates." For example, if your bottom line is $10,000, you would allow $1,500 for photography, $600 for a dress, $500 for flowers, $300 for a cake, $300 for stationary, $5000 for reception etc.

3) Now get actual estimates. Get at least three for each item and put them on a budget spreadsheet.

4) And now the difficult part! If you are like most people..what you want and what you can afford are
two separate things. Get together with your fiance and prioritize. Figure out what are the most important elements of your wedding and put your money there.

5) You will be amazed at how different your ideas are from your groom-to-be´s. Get ready for your first lesson in matrimonial bliss... compromise!

6) Sadly, no matter how much you "do-it-yourself," you will probably still have to minimize in a couple of areas. A good place to start is the guest list. Also, changing the reception from dinner to a brunch or an evening cocktail party or dessert reception can take a sizeable chunk off of your reception total.

Be prepared to have an open mind and be imaginative. You should still be able to pull off the wedding of your dreams within a realistic budget!

What are the tax implications of getting married?
Once you are married you are entitled to file a joint income tax return. While this simplifies the filing process, you may find your tax bill either higher or lower than if each of you had remained single. Where it's higher it's because when you file jointly more of your income is taxed in the higher tax brackets. This is frequently referred to as the "marriage tax penalty." Tax law changes intended to reduce the marriage penalty became effective in 2003, but don't eliminate the penalty for taxpayers in the higher brackets.

You can not avoid the marriage penalty by filing separate returns after you're married. In fact filing as "married filing separately" can actually increase your taxes. You should consult your tax advisor as to the optimal filing status for your situation.