VOL. 129 | NO. 90 | Thursday, May 08, 2014
Rays of Wisdom
Dana and Ray Brandon
Merging Financial Identities
By Ray and Dana Brandon
Ray’s take: Americans are getting married later. The 2013 figures from the Office for National Statistics show the average age at which men get married is 31 years, while women are typically aged 29 years when they tie the knot.
There is an old saying that “two can live as cheaply as one.” However, that’s only true if one of them doesn’t eat or wear clothes. Although you now only have one cost for housing, you still have to pay costs of cars, food, clothing and other necessities of life for two. Finances are absolutely something you will be dealing with as a couple.
Since people are now getting married later in life, they have been out on their own for a period of time during which they developed their “financial identity.” You may be a spender and your spouse a saver. How you deal with this is a major factor in your marriage. A 2010 American Psychological Association study found that 76 percent of Americans see money as a source of stress in their lives.
To reduce stress, couples need to come together and decide how to spend and save their money. Coming up with jointly held values involves some give and take. If you like to buy lottery tickets because “you can’t win if you don’t play,” and your spouse sees it as a waste of money, jointly decide on a spending limit. That agreed upon pool of money allocated to each spouse can be spent on anything, relieving financial stress while still providing a dose of financial freedom.
Many times couples have some individual pieces of their finances in place, but working together to create a holistic plan that is reviewed on a regular basis brings goals, and people, closer together.
Dana’s take: I heard a radio ad for a wedding planning event and thought how these brides and grooms enter marriage carrying more student loan debt than ever. At the same time, weddings are becoming more lavish.
Ray and I often recommend that the parents of a bride or groom consider gifting a lump sum, allowing the couple to decide how to spend it. In a case where the couple carries a combined mountain of debt, the newlyweds might choose to pay off their debt. Maybe skip the covered chairs and gilded swan centerpieces and enter marriage debt-free?
Money and debt can become a blame game in a new marriage so consider starting out with a clean financial slate. All the better to keep those vows, “for better or worse, for richer or poorer, in sickness and health.”
Ray Brandon is a certified financial planner and CEO of Brandon Financial Planning (www.brandonplanning.com). His wife, Dana, has a bachelor’s degree in finance and is a licensed clinical social worker. Contact Ray Brandon at email@example.com.