THE MONEY TALK

HAVE THE “MONEY” TALK

before tying the knot

In early May, my wife, Gina, and I sat in the front row and watched as our son and new daughter-in-law recited their vows. We will soon have the privilege of once again having the best seats in the house as we watch our daughter and soon-to-be son-in-law recite their vows. Two marriages in two months. So many thoughts, emotions, hopes and dreams for both of our kids. Words of advice shared with hopes that they will be adhered to while knowing that there is no guarantee that they will. Here are a few nuggets shared with my kids that I wanted to share with you.  LOVE AND MONEY CAN BE COMPLICATED. Although early on in a relationship it may be difficult to imagine the love of your life having any flaws, time together will bring clarity to differences in attitudes, priorities, and behaviors. Before you walk down the aisle, it’s important to realize that no matter how uncomfortable the topic might feel, it is important for both of you to have a deep understanding of each other’s financial attitude, dreams and current position. Putting this conversation off “until later” is a big mistake that can have nasty consequences. Start with full disclosure regarding any debt that either of you may have. Credit card debt or student loans that one person may think of as “normal” may be a shock to the other and it is unfair to bring debt into the relationship without full disclosure. You need to not only be open about each other’s debt; you also need to discuss your plan for eliminating it. Along those same lines, share your credit scores with each other. You are going to join forces to take on life’s challenges and understanding your fiance’s credit history is important. These facts may become obstacles when it comes to qualifying for a mortgage together or reaching other financial goals, and avoiding the topic is not going to help. Next, you need to talk about how you are going to financially function as a new household. Are you going to keep separate checking, savings and investment accounts, or will all the financial assets you have be co-mingled? Does it make sense to have a segregation of duties which play to each other’s unique talents? For example, if one person enjoys being a savvy shopper and the other is a more impulsive purchaser who does not enjoy taking the time to look for values, it may make sense to put the former in charge of purchasing. In some cases, one of you may really dislike paying bills while the other loves these tasks. Regardless of whether you take on these assignments equally or one of you becomes the de facto household CFO, you still need to make ongoing communication of your financial status a priority. You should agree on the method you're going to use before you say "I do."  FOCUS ON THE MARRIAGE, NOT THE

WEDDING.

Do not go into debt for your wedding. Although it may be tempting to indulge in fantasies of a fairy-tale wedding, it is simply not worth incurring debt that might take years to pay off. Focus instead on your marriage. Afterall, isn’t that what it is all about? We shared with our kids that both Gina and I came from humble backgrounds. When we decided to marry, we had to face the reality that we could not afford a traditional wedding with a nice evening wedding reception including an upscale dinner. Instead, we got creative and had a morning wedding with a champagne brunch for a reception for a fraction of the cost. Afterwards, guests were welcome to change into comfortable clothes and to come to my family’s farm for a pig roast and potluck meal. Thanks to the generosity of family, friends and neighbors, this was a big success despite having a miniscule price tag. Although that was over 30 years ago, to this day I’m still reminded by attendees that it was one of the best receptions that they had every attended.

 CREATE GOOD FINANCIAL HABITS TOGETHER. Your upcoming wedding is an opportunity to set

good financial habits together. Agree on a budget and set financial goals and priorities together. This can be difficult to do without insight from a third party who is at arm’s length — a role a good financial advisor can fulfill. Including a financial professional with a good financial planning software program to complement their insights can make a world of difference and help make those dreams a reality. Make this commitment today and your future self will thank you.

This material is intended for informational purposes only and should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney, tax advisor or plan provider. Any opinions are those of Tom McCartney and not necessarily those of Raymond James.

 Tom McCartney is the Founding Principal of My Advisor & Planner and a Wealth Manager. Securities and Investment Advisory Services Offered Through Raymond James Financial Services, a Registered Broker/Dealer and Investment Adviser, Member FINRA/SIPC. My Advisor & Planner is independently owned and operated. Tom and his team can be reached at info@ mapyourfuture.net, at 630-457-4068, or you can visit them at www.mapyourfuture.net.