2. Debt Facts
Conflicts over spending inflict the most
damage on a marriage during the first year
Debt - one of the most difficult hurdles
Root of money fights
Cardinal Rule of
Love and Money:
Never join your
finances outside
of marriage.
3. Six Questions Every Prospective Marriage
Couple Must Ask Each Other
Question 1: Do You Have A Basic Understanding
of Money?
Fastest-growing source of bankruptcy
Evidence of a good understanding of money
Regularly balance checkbook
Live below your means
Carry no credit card balance
Wary of an interest-only
mortgage
4. Overheard from a person who lacks an
understanding of money
“I was charged late fees on
my credit card.”
“I never have the money to
afford the car-insurance
premium when it routinely
rolls around.”
“I cannot make ends meet.”
5. Six Questions Every Prospective Marriage
Couple Must Ask Each Other
Question 2: What Is Your Money History?
Question 5: What Are Your Financial Assets
and Liabilities?
Question 6: How Do You Use Debt?
How much debt do you each have?
What type of debt?
Question 7: Will We Operate
From One Checkbook…. Or Three?
6. Six Questions Every Prospective Marriage
Couple Must Ask Each Other
Question 8: How Should We Divide Financial
Duties?
Two Strategies to Consider:
Gatekeeper
Tag Team
7. Budgeting
Budgeting boils down to X, Y, and Z.
Earn X dollars each month
Spend Y dollars in
fixed costs
Have Z dollars remaining
Emergency Savings Account
“Budget Busters”
9. Formulating a Debt Philosophy
“We agree together to
purposefully live below our
means, not to pursue
material wants without the
money to afford them, never
to use emergency savings
for consumer purchases, and
to take on debt only when
it benefits the family’s
long-term goals or needs.”
10. Preventing Living Beyond Your Means
Determine these questions as a couple:
What expenses are worthy of credit?
How will you repay the charges?
11. Visit us at www.ministrycpa.com for more
presentations or to connect with a tax professional.
Visit our Q&A blog at
www.ministrycpa.blogspot.com
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Watertown, WI 53094
(920) 261-7012
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Editor's Notes
Opdyke’s book is directed to new couples and aspiring ones! Particularly useful, I believe, are the many questions that Opdyke recommends to be addressed before bad financial decisions are made. He seems to genuinely desire couples to live happily, financially ever after.
Two-thirds of newlyweds surveyed by the Association of Bridal Consultants report that conflicts over spending inflict the most damage on their marriage in the first year. Debt brought into marriage ranks as one of the three most difficult hurdles new couples face during their first five years together. It’s not the money that’s at the root of money fights. It’s the inability to communicate effectively about money.
Six Questions Every Prospective Marriage Couple Must Ask Each Other (the author asks 10) Question 1: Young adults are– those between 20 and 24– represent the fastest-growing source of bankruptcy filings in the country. None of that indicates a basic understanding of money. It does, however, indicate a basic understanding of spending. Evidence of a good understanding of money: Regularly balance your checkbook when the statement arrives. Live below your means. Refuse to carry a balance on your credit card. Leery of an interest-only mortgage that allows you to buy the $300,000 house you otherwise can’t afford.
Question 6: How Do You Use Debt? What type of debt?– credit cards, auto loans, mortgage, student loans? What you want to be wary of is a partner who is blasé about debt, who carries a relatively large balance, who generally only pays the minimum due each month, who continues to accumulate ever more purchases on the card.
Budgeting boils down to X, Y, and Z: You earn X dollars each month– your combined family income You spend Y dollars in fixed costs each month– your mortgage/rent, utilities, insurance, taxes, etc You have Z dollars remaining ** Effectively manage those Z dollars (discretionary dollars) and you are in control of your finances. ** Before you start saving for a house, before you pay off all your credit cards, before you fully fund your 401(k) plan, you should start building an emergency savings account. This may be the best piece of advice I can offer you to help eradicate a meaningful slug of the financial stress that can ignite arguments between you and your spouse: Save every month for the routine, non-monthly expenses that pop up in surprise fashion every quarter or once a year. (“Budget Busters”)
You could spend a lot of time writing down the amount of every bill that arrives, but that’s monotonous and you’ll tire of that quickly. 2 methods: Cash in the envelope The monthly spending scorecard Allowances create a level of autonomy within the confines of marriage, yet allow the finances of the relationship to Remain unified.
The moment you spend on credit more money than you know you have coming in, you are, by definition, living beyond your means and using high-interest money to pay for a lifestyle you otherwise can’t afford. To prevent such problems, you need to determine as a couple the answers to two questions: What expenses are worthy of credit? How will you repay the charges?
