Financial Advice Married Couples May

Not Want to Hear

It is not news that disagreements over finances is one of the main reasons couples end up in
divorce court. Financial advice is readily available, but married couples are still fighting over
money. Why? For a variety of reasons, couples appear to not want to hear the financial
advice.

Here is financial advice that married couples often ignore.

1) Create Separate Accounts and One Joint Account:

To mingle or not to mingle your money is one of the most important decisions the two of you
need to make regarding your finances.

Having your own money that you can spend however you want can lessen arguments about
money. We disagree with the belief that having separate joint accounts lessens the sense of
unity in marriage and shows a lack of trust in one another.

2) Track How You Are Spending Money:

It's called a budget. Tracking your spending is not a way to point fingers at one another as to
who is spending what. Tracking your spending is not having someone looking over your
shoulder every time you buy something. Tracking your spending is critical to being
financially secure. Unless you know where your money is going, it is impossible to
set financial goals you are both comfortable with.

3) Set Your Financial Priorities Together:

Know what is important to each of you. One of you may want to buy a house while the other
thinks saving for your retirement is more important. Seeking the help of a financial planner
can help you set your priorities and still spend money on some fun things like a vacation now
and then.

4) Discuss Finances Together on a Regular Basis:

Sure, talking about money isn't easy because money can symbolize different things to each
partner. One may view money as security and the other as power. If the topic of debt, bills,
savings, and goals makes one or both of you uncomfortable or defensive, seek the help of a
financial counselor or planner.

It is important that both of you know where you stand financially and have common financial
goals.
Financial Questions to Discuss With One Another

5) Save 10% of Your Income:

Couples living month-to-month often rationalize that they just don't have enough money to
save. Make the decision to save at least 10% of your income. After saving enough cash as an
emergency fund, invest in a retirement account. The earlier the two of you start saving money
for your retirement years, the easier it will be have a retirement lifestyle that you both hope
for.

6) Handle Debt as a Couple:

Make a plan to pay off existing debt. Drawing a line in the sand and saying that your spouse's
debt isn't your problem is not going to work because even if the debt existed before you
married, your credit rating can be negatively impacted as well as the bottom line of how much
money the two of you are paying monthly in interest charges.

7) Try to Live Debt Free:

Couples often don't want to wait to have a new television, new car, and other new gadgets.
They rationalize that people just don't live without credit cards and debt. Although it may be
true that many people are heavily in debt, that doesn't mean it is a healthy way to handle your
finances.

8) Don't Keep Big Financial Secrets:

Not being honest about the cost of large financial purchases or keeping debts hidden is
considered financial infidelity by many people. Such secrets can destroy your marriage.

Financial Cheating

9) You May Have to Face Tough Times Financially:

No matter how much you plan and talk about money, no matter how much you save, no
matter how frugal the two of you are, there still could be tough times and unemployment in
your financial future.

How to Handle Rough Financial Waters

Why Couples Shouldn't Merge All Their Finances

Marital bliss doesnt always extend to money. How does a new couple combine
finances, or should they? Kimberly Howard, the owner of KJH Financial Services in
Needham, Mass., offers some guidance:
When a couple weds, they often feel pressured to marry their finances
together, as well. Thats not always such a good idea.

Although some of us want to go into a marriage sharing everything, smart

financial planning actually dictates that you dont have to and in many cases
shouldnt put all of your money into a single account. You can have both
cooperation and autonomy in your financial marriage.

Money is one of the biggest stressors in a relationship. A survey by the

American Institute of Certified Public Accountants found that money is the
biggest cause of arguments between men and women. Financial matters
caused 27% of spats. Children only caused 16%. Some couples feel that a joint
bank account signifies trust and discourages regretful impulse spending by
either party.

Maintaining separate accounts isnt a sign of distrust. In fact, the opposite is

true. Allowing your partner to maintain financial independence says that you
trust that person to not keep secrets about finances and to contribute
responsibly to your financial life together. Autonomy also fosters self-
confidence. That feeling of control over your own money is critical.

Many couples use what I call the three pots system, where each spouse
contributes money to one account for household expenses, and has a separate
account for individual expenses. Especially with the proliferation of Internet-
based banking, its very easy to set up separate individual and joint accounts.
Neither partner gives up independence or autonomy completely, but some
finances mingle. Here is how you can make it work:

Keep a joint bank account for joint expenses. This can really simplify
bookkeeping for the household budget. You dont have to contribute equal
amounts (and shouldnt if one earns significantly more than the other), but the
total each month should cover everything you agree to pay together, such as
the mortgage, utilities, groceries and insurance premiums.

Create a detailed budget together. You need to know exactly where your money
goes and how much you need each month to cover all of your expenses. Once
you start spending someone elses money, its important to account for it. The
household budget must include only the things you both agree to pay for
together. Forge this agreement before you actually wed.

Keep separate accounts for separate expenses. Costs related to one spouses
hobby need to be in separate budgets. Maybe one enjoys concerts and the other
collects books. Make these optional purchases with money each person sets
aside in a personal account. If you have just one account, one partners
spending might cause friction.

Use the same rules for credit cards. Consumer debt should not be shared.
Consider opening a joint account for charging things such as family vacations
that you plan to pay off together.

Successfully managing credit cards in marriage requires total honesty. Dont

hide purchases, especially debt. Your separate credit card debt doesnt affect
your spouses credit score, but it does affect your ability to move forward as a
team with large, important purchases like a home.

Save together and dont keep secrets. This is the most important key to
financial success as a couple. Part of your financial life together must be
saving. Make a plan for building an emergency fund and retirement accounts
for each spouse. If you have children, discuss whether and how you plan to
help them pay for college.

One might be willing to borrow money later on while the other prefers to start
saving early. Touch base about financial details at least several times each year.
It helps if you both visit your financial advisor together so each partner is up-
to-date on the familys finances and participates equally.

The Six Financial Mistakes Couples Make

If you and your partner are like most couples, chances are, you fight about money. Numerous
studies have shown that money is the No. 1 reason why couples argue and many of the
recently divorced say those battles were the main reason why they untied the knot.

While anyone will tell you that talking about money is the first step in resolving problems,
talk alone won't do the trick.

In fact, a 2004 study commissioned by SmartMoney magazine and Redbook, another Hearst
publication (SmartMoney magazine and SmartMoney.com are jointly published by Dow
Jones and Hearst), found that more than 70% of couples talk about money on a weekly basis.
So what's the problem? "Most of us don't know how to talk about money," says Mary Claire
Allvine, a certified financial planner (CFP) and co-author of "The Family CFO: The Couple's
Business Plan for Love and Money."

"People tend to be emotional and reactive about money, not strategic," she says.
When emotions run high, people tend to make fiscal mistakes. Allvine's solution: Approach
family finances as if you were running a business. "If you put a business metaphor into the
picture, you'd be surprised how much more methodical people are."

And so, to help make your next state-of-the-financial-union meeting run smoothly, we've
assembled a collection of the six most common mistakes couples make when handling money
issues, along with some advice on how to correct them. Do yourself a favor: Make sure all
board members review this before you talk.

1. Merging the Finances

The Wrong Approach: United we stand, divided we bank
The Right Approach: It's yours, mine and ours

One of the first issues newlyweds face is how to handle their finances."Couples struggle about
this one," says Ruth Hayden, author of "For Richer, Not Poorer: The Money Book for
Couples." Should you merge everything you have and earn into one joint account, or should
you maintain individual accounts and open a joint one for household expenses?

SmartMoney magazine's survey found that the majority of couples (64%) put all of their
money in joint accounts, while 14% kept everything in separate accounts, and 18% had both.
"Married couples should try different ways of handling the money to see what works for
them," says Ginita Wall, CFP and co-founder of the Women's Institute for Financial
Education.

For many newlyweds, the right choice may be somewhere in the middle. "You should have
some autonomy money, I should have some autonomy money, and we need to learn how to
practice being a couple together with our money," says Hayden.

The advice is different when one spouse enters the marriage with a high debt load. (See our
next point below.) But assuming you both have a clean bill of fiscal health, finding a way to
blend finances comfortably without feeling like big brother is watching every financial move
you make can dramatically cut down on fights. Over time once kids and mortgages come
into play many couples find that merging all their finances is simply easier. But unless
you're both comfortable with the idea, there's no need to rush things.

2. Dealing With Debt

The Wrong Approach: Your debt will ruin us; you must find a way to pay it off
The Right Approach: It's our debt: Let's decide how to pay it off together

Of all the issues that spark a fight, debt ranked No. 1 for most (37%) of SmartMoney's survey
respondents. "That's one of the places where couples have most disagreement," says Hayden.
Couples often don't see eye to eye on how much debt is too much and which kind of debt is
bad.
Compounding the problem: in many cases, one spouse enters the marriage with a lot more
debt than the other. "We saw that more frequently than we anticipated when we began
interviewing couples [for our book]," says Allvine. "It's almost unavoidable. Even if you
manage to get to your 20s or 30s without debt, you hook up with a partner who's in debt."

What to do in situations like that? Like it or not, once you're married, your spouse's debts can
become your problem. Granted, you're not legally responsible for the credit-card balances ran
up before you got married, or for any loans opened in your spouse's name alone provided
you keep your finances completely separate. (Unfortunately, all bets are off should you get
divorced.) But even with separate finances, your spouse's credit score will affect your ability
to get joint credit. "It's a public [credit reporting] system, and what you do will absolutely
affect the other," says Hayden.

For those couples not yet married, it may be worthwhile to think about a prenup, just to make
sure that assets that one spouse brings into a marriage will always be protected from the other
spouse's creditors.

But those who've already tied the knot should find a way to pay down the debts as quickly as
possible, and without any late payments.

3. Keeping Spending in Check

The Wrong Approach: I'm a saver and you're a spender. That's the problem
The Right Approach: We both spend, but on different things. Let's budget

Your husband keeps nagging at you that you spend too much but then comes home one
day with a huge smile and surprise! a 70-inch flat-screen plasma TV. He happily
explains how he sealed the "terrific" deal. You're definitely not impressed.

Sound familiar? Spending is the second most common reason why couples fight, according to
SmartMoney's survey. What usually happens, explains Hayden, is that one spouse gets
labeled the "spender" and is blamed for skimming all the money out the checkbook. In most
cases, however, that's not accurate. "Studies show that men and women spend the same, they
just spend differently," she says. Women usually take care of most of the family's daily
expenses: the groceries, the bills, clothes for the family while men spend on large
purchases like plasma TVs, cars or computers. "If you counted up your money, you would be
spending about the same," Hayden says. "But because you spend so differently, the perception
is different."

The solution here is to identify the real problem, Hayden says namely, that you're both
spending money on a tight budget. Then sit down and decide how much money you'll allocate
to the "dailyness" of life, and how much to save for the big purchases. "What we're trying to
do is get the 'Surprise!' out of it," she says.

4. Investing Wisely
The Wrong Approach: You're a risk-taker, I'm risk-averse. Hands off our retirement savings
The Right Approach: Let's think in time frames and take as much risk as our goals allow
SmartMoney's survey showed that when it comes to investing, men are more willing to take
financial risk than their wives (62% for men vs. 19% for women). But fighting about how
much risk to take with your investments based on how you feel about risk doesn't do much
good. Rather, sit down and talk about your investment goals and time frames, says Christine
Larson, co-author of "The Family CFO". "You could be completely risk-averse with money
you need for next year, but you can be a huge risk-taker with money you're saving for
retirement," she says. If that doesn't work for you, seek the help of a broker or a financial
planner.

Whatever your investment choices, review your investments together at least once a year and
make sure that, overall, your portfolios balance each other out, suggests Wall. "I have one
couple they're in their 70s. She likes to take risks and it scares him to death, so they do
invest themselves separately," says Wall. "We let her take risk with part of the money, but not
all of the money."

5. Keeping Money Secrets

The Wrong Approach: What my spouse doesn't know will never hurt him/her
The Right Approach: Big financial secrets can ruin a marriage

Among Hayden's clients is a family that first came to see her when the wife found out that her
husband had lost a lot of money trading commodities. The real problem? She didn't know his
little secret. "It got them in horrible trouble!" Hayden says. "He's very steady, he's a fabulous
doctor, he's a great dad...but he had this other part of him that's pure gambler, and it almost
brought the marriage down."

Will you be shocked to hear that most couples do keep money secrets from each other? While
secret trading or gambling may not be that common, our survey saw 36% of men and 40% of
women confess that they had at one time or another lied to their spouse about the price of
something they bought. "It's the most common secret," says Wall.

Is it a big problem? Depends on how you deal with it. "Most people also lie to themselves
about what they're spending, just as they lie to themselves about how much they're eating,"
says "The Family CFO" author Allvine. And let's face it, if your wife saved up the extra $100
for her "only $30" Givenchy scarf from her monthly mad money, it's not that big a deal. But if
your spouse has been squirreling away thousands of dollars, it may be time to seek the help of
a family finance professional. "If this happened in a company," Allvine says, "they'd call it
embezzlement."

6. Emergency Planning
The Wrong Approach: We're fine. We don't need to worry about money
The Right Approach: Anything could happen. Let's plan for emergencies

Even if you have a great career, earn a comfortable living and don't have to worry about debt,
you could find yourself woefully unprepared for an emergency. "Couples today are under so
much stress that anything could tip them," says Hayden. An unexpected pink slip, an accident,
illness anything could throw you off track if you don't have an emergency savings account.
"With the couples we interviewed, we found a tendency to panic [in an unexpected
emergency] that could lead to the wrong decisions," says Larson. Bottom line? All couples
should have an emergency stash of three to six months' worth of living expenses held in a safe
place, like a money-market fund. Simply knowing it's there can reduce stress, since you know
you're not walking a fine line between comfort and catastrophe.

SmartMoney.com 2007 SmartMoney. SmartMoney is a joint publishing venture of Dow

Jones & Company, Inc. and Hearst SM Partnership. SmartMoney is a registered trademark.
All Rights Reserved.

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What's mine is mine: 10 couples on how they arrange

their finances | Money

'My husband would treat me to a pair of shoes if I were neglecting myself'

Anna, 36, is a part-time copywriter, earning 6,000. Her husband Mark, 37, earns 26,000 as
a project manager. They have two children and another on the way.

I know it's an unusual arrangement to have a joint account for absolutely everything, but I
think it works because he's generous to a fault. There are times I feel I'm not pulling my
weight these days, though in the past I've been the breadwinner. He's absolutely brilliant; he's
never made me feel bad. It's been, "This is your bank account, this is your Switch card, you
do what you need to do."

I don't go and buy myself clothes if I don't feel I've earned much that month. I've really
noticed that. I know if I said that to my husband, he would say, "Look, that's ridiculous." He'd
treat me to a pair of shoes if he felt I was neglecting myself.

It's old-fashioned; a bit strange, definitely. When I discuss this sort of thing with my friends,
there aren't many people like that. I don't think there are a lot of men who would say, "You
haven't earned anything but go and treat yourself to shoes."

Discussing this with a friend recently, she said she wouldn't be able to tolerate my
arrangement. She said every time she bought a cup of coffee or a lipstick from the joint
account, she'd feel he was breathing down her neck. But our personality types make it quite a
laid-back arrangement. Neither one of us is particularly organised or brilliant with money.
Should I have a bit of financial independence or freedom? I don't feel that's something I need.
If something terrible happened, I'd cross that bridge when I came to it. I won't live for the
worst-case scenario.

'He's bought our son one jumper, I've bought everything else'

Claire, 33, earns 35,000 as a full-time editor. Her husband Paul, 38, is a police sergeant on
45,000. They have a seven-month-old son.

We moved in together after a year, and everything was fine until we got a mortgage. I thought
it would make sense if we had one account for all the bills that we could pay some money
into, and then whatever we had left would be our own. So I got the forms for a joint account,
and he never signed them. They lay there for three years until I chucked them out. I reminded
him and he said I was nagging, so I stopped mentioning it. Since I got pregnant, he's bought
our son one jumper and I've bought everything else; he hasn't paid me back.

All the bills are paid on a very casual basis I pay some, he pays some and it does my head
in, because I never know where we are with money. Both of us probably think we pay the
bigger share, but I don't actually know who does.

There's no system at all. I'm paying all the childcare at the moment and he just keeps saying,
"Oh, I'll do it." I would drop dead with shock if he came home from work and had sorted it
out.

Recently I was trying to work out our exact outgoings, to see if we could afford for me to go
freelance now I've had a baby; he promised to do his as well, but hasn't, and I'm back at work
full time.

We went to Relate and this came up. The counsellor said to him, "It's a form of control; you
really need full financial disclosure." My husband was surprised at my strength of feeling
about it and that I saw it as him being secretive. But if I bring the subject up, he gets really
wound up and changes the subject; it ends in a row. It's not the 1950s. He's 38! Grow up.

'I pay for everything we do'

Steve, 33, earns 70,000 as a lawyer. His boyfriend Toby, 28, is doing a PhD. They have been
together for six years.

We don't do joint finances because Toby's too proud, and because I spend it all recklessly
rather than save. I pay for pretty much everything that we do. It's normal I make much more
money.

I've said lots of times, "Why don't we just pool the money in a joint account?" He
doesn't want that: he doesn't want to feel as though he's in a sugar-daddy relationship.
He prefers not to go to fancy restaurants; he prefers something simpler.
He always says things like, "Oh, I need to pay you back for this", and of course he never does.
It doesn't matter, but it helps him feel I'm aware that he's grateful. He's got a credit card with
his name on it, but it's my account, my current account. Yes, I give him money sometimes. It
depends how much he needs: when he went to the US, it was $1,300. Like any relationship,
it's "What's mine is yours".

'We see ourselves as one'

Graham and Elizabeth: Since we moved in together, our money's been each others. Everythings jointly
owned Photograph: Christopher Thomond for the Guardian

Elizabeth, 59, and her husband Graham, 61, are retired teachers.

We've been married more than 30 years. Since we moved in together, all our money has been
each other's we have a joint account. Everything is jointly owned. I think it's a Christian
thought that what you have, you share, and that you are part of one family.

I am guided by the teachings of Jesus in terms of having a one-world perspective. We have a

lot of creature comforts, but we don't value material possessions that much. At different times
in our lives, my husband has worked, I've not; and I've worked and he hasn't we see
ourselves as one. The principle is to help each other, and that would include members of the
wider family: others who might be in need. Whenever we can, we donate to charity. At the
moment we're living on 1 a day for food for Lent, to raise awareness of third world hunger.

I think it's about sharing. You have a responsibility to care for other people, because the way
in which we survive is interdependent on a global scale. It's about being mindful that what we
have is not ours.

'We put everything in an Excel document'

Tom, 24, works in PR and earns 30,000. His fiancee Alice, 24, works in retail and earns
18,000.

You're going to laugh: I have a life plan based on an Excel document. It works. It's got
columns for monthly salary in, outgoings, savings and savings towards the mortgage. When
my fiancee came to London and we got our own flat, we said let's build on this Excel
document and adapt it for both our incomes. We worked out a system.

We have separate accounts. In terms of how much of the bills we each pay, I have split these
in proportion to our salaries. I earn 70% of our total income, so I pay around 70% of the
aggregated total including water, electricity, Sky and internet.

In terms of food, she pays me 80 a month and I will cover the difference we usually spend
around 210 on food. She's got a credit card, but I pay it off if it's for food and household
stuff. It was just a way of being fair. I know it sounds very precise and mathematical, but it
works.
I suppose the whole point of being engaged is that it's a trial period to see how things would
work out in married life. If she were earning more than me and if she paid more of the bills,
from a male point of view I wouldn't feel comfortable. There'd always be the dreaded
conversation with the in-laws her parents would be like, "Ah, well..." I think we'd probably
go back to 50:50. I do have a little pride.

Her family is far better off than mine. I've had to struggle to get money. A lot of my friends
get help from their parents with mortgages, I wouldn't feel comfortable with that. That's
probably why I feel that fairness with money is important.

'I just think he's tight'

Sarah, 44, is a sales manager earning 15,000. Her partner Ian, 46, is a public servant on
over 60,000.

To me, a proper couple shares everything. We're very much two individual people in a
relationship and it's really difficult. My boyfriend wants it to be that his money is his and my
money is mine, even though we have a five-year-old boy and we've been together seven
years. He also expects me to pay for our son's childcare and for half of all holidays.

He earns four times as much as I do, but he's very much, "Why should I pay for more because
I work hard for my money?" He feels that his money should be his to do with as he likes. He
thinks that I have a nice, fluffy little job and I get to do lots of nice things and I don't work
very hard. I just think he's tight.

The house belongs to me. I bought it before I met him and he moved in. He grudgingly pays
half the mortgage, but he doesn't think he should do any jobs in the house because it's not his.
When I say jobs, I mean fixing, cleaning or decorating.

If I want to go out at night, I have to send him an email and ask, "Is there any chance you can
be around to have [our son] on this night?" He just plans what he wants to do when he wants
to do it.

It does rankle, and a lot of people think I'm a single mum, but I've got to the stage where it's
not worth arguing about. It's never going to be any different. I don't think it would change if
we were married, I really don't.

The main reason we're together is because of our son, so he can have a stable upbringing. It's
not the best relationship in the world. I feel as if I'm not a valid partner in the relationship.

'We split everything two ways'

Poppy, 21, is a junior consultant on 20,000. Her boyfriend Ryan, 23, earns 30,000 in
entertainment. They have been living together for seven months.
We have separate accounts. We haven't been cohabiting very long and it's safer to buy some
things individually, in case we were to split.

We moved last weekend and bought some furniture together. We said that if we were to split
up, the other person would pay the difference to buy it off the other.

We're very open. He earns a bit more than me, and he's got more disposable income, so if he
wants to buy something and I'm all, "Oh, I don't really want to buy that", we'll both use it but
he pays for it. We'll joke about it. I'll say, "You earn more than me, it's so unfair." It's not like
resenting him or anything. It's quite a laid-back relationship.

Everything has a receipt: we say how much it costs and we'll split it two ways. Receipts for
everything that we both use go in.

I think if we got married, there wouldn't be as much keeping track of how much we spend.
For us, it's still quite early on. You never know what's going to happen.

'I have a separate account for my gambling'

Siobhan and Nick: 'It's nice to have that bit of privacy and to be able to spend what you want.'
Photograph: David Yeo for the Guardian

Nick, 27, works in recruitment and earns 40,000 plus commission. His girlfriend Siobhan,
27, is a project manager earning 40,000.

We've got a shared bank account and individual accounts, and we each put 1,200 into the
shared bank account. Then we use our money what we've got left on what we want. Food,
shoes: all the stuff that's non-couple-related.

And I have a separate account for my gambling mainly football betting. Each month I put
about 350 into that. I've made a few grand a few times. I'm doing OK at the moment, but
sometimes I lose it all. I wouldn't want to gamble with her money, definitely not. She
probably doesn't realise how much I spend on it. We're trying to save at the moment, so she'd
probably mind.

A lot of my friends do pretty similar things, if they've got girlfriends they're living with.
People like to keep their independence. It's nice to have that bit of privacy and to be able to
spend what you want without your partner having a go at you for being frivolous.

'What was hers was mine and what was mine was my own'

Bill, 71, is a retired dustman and construction worker. His wife Margaret, 67, is a retired
local government worker.
I was brought up when there wasn't a lot, during the war, with violence from my father, and
left school at 13. When I met my wife, she had a big bank account when she met me, it
disappeared very quickly. I'm an alcoholic, but I haven't had a drink for 26 and a half years.

I never had a bank account until the mid-1970s. You used to get your wages in cash. I gave
my wife her money every week and I had my money to drink. It was a struggle; we struggled
through life.

The missus didn't work once the first child came along in 1967. What was hers was mine and
what was mine was my own. I was contributing, but being an alcoholic you're self-centred
you must have your fix, and I suppose I wasn't the best father.

This year we've been together for 50 years. Our only income is our pensions, which pay for
our housing association home. Growing up, we always had family, and families seemed to
pull together. I don't think there's enough of that these days.

I carry a very small purse: sometimes it's empty, sometimes it's full of change. Very rarely
there's notes in it, but I'm never broke. It was Valentine's Day the other day and I had enough
in to buy flowers for the missus. They weren't red roses, they weren't chocolates. They were a
small bunch of daffodils and now they're blooming.

'We spent my money and saved hers'

Pete, 47, lives on benefits. His ex-wife Zoe is 45 and a full-time mother of their two children.

We were a couple with no children in our mid-30s with two good incomes. My ex was a
secretary and I was in marketing and helping to run nightclubs. We were up in London
painting the town red.

It was always in the arrangement that we would spend my money and she would save hers,
putting away for the likelihood of family and a deposit on a house. That arrangement worked
well for me, because it meant I didn't have to think about it. We went out clubbing and I
would pay for the taxi, I would pay for the club entrance and the drinks she was ordering
champagne by the glass at Pacha.

After a couple of years, she got pregnant and we moved to a rented house in Wales, where
we'd both grown up. I was going to take some quality time out for paternity leave, start a new
business, but it takes time to set that sort of thing up, and by the time our second child came
along, we started arguing and the relationship was suffering.

When finances became an issue, I said, "Well, we've got savings and if this is a rainy day,
perhaps we need to dip into them." She said: "Oh no, no, that's been set aside for a deposit on
a house."

Then she had an affair and I had to leave. I found out that over the previous nine months she
had squirrelled the savings out of her account into her mother's and brother's accounts. So it
wasn't there and it wasn't easily provable.
That was four years ago; we just got our divorce after a very vitriolic family court process. I'm
trying to set up a business, but I'm in a bedsit, and the housing benefit doesn't cover my whole
rent, so every month I go further into debt. She went around our home town telling mutual
friends that I wasn't maintaining the children, but I know she is actually drawing upon the tens
of thousands of pounds she saved when we were together, so my conscience is clear.

I have confronted her she just sneers and walks off. At one point she said, "Well, it was
mine in the first place." Well, hang on, you were drinking champagne by the glass out of my
wallet. In a future relationship, I'll have a joint account.

Some names have been changed.

Personal Finance for Couples

Hashing out monetary matters may not make for romantic pillow talk, but a little financial
planning can do a lot for your love life down the line. Here are a few pointers to help you stay
smart when following your heart:

Get Acquainted

You must talk money before your relationship becomes seriousa person's financial habits
are an incredible insight into his values and ethics. That doesn't mean a lousy credit score is a
reason to break up, but if you find that your new love interest doesn't handle money
responsibly, you have to question what else he isn't going to be upright about. If you're the
one with the issues, be honest about your shortcomings. A good relationship is one in which
each party helps the other make better choicesand you and your beau might be able to help
each other become smarter about money.

Meet in the Middle

Whether you are newly engaged or suddenly find a long-term relationship challenged by a
financial setback, support each other. Retreating to your corners does not help. Nor does
finger-pointing; blame doesn't help your balance sheet. To address any money problem, you
need to work together to come up with a game plan.

Consider Yourselves Equals

Who makes what is irrelevant. Do you hear me, stay-at-home moms? The size of your
paycheck does not determine your role in the family finances. Respect each other as equal
partners, with an equal say in money management.

Put It in Writing

I know there's nothing sexy about legal forms. But ensuring that you have the correct
documents in place to safeguard you and your assets is a must. A prenuptial agreement will
clearly delineate what is solely yours before marriage, meaning you will be protected if you
divorce. For those contemplating a second marriage, the only way to protect the assets you
bring to the tableespecially if you want them to go to children from a prior marriageis to
create a legal trust. That document will spell out what portion of your personal assets will pass
to your children, rather than to your new spouse.

Fools Rush In

Debts you had prior to marriage are yours aloneunless you actively merge them. When you
wed, don't automatically rush to combine everything. You can help each other out by chipping
away at your loans without becoming officially responsible for each other's.

Divide and Conquer

Here's how I suggest every cohabiting couple organize their cash flow: Create three
accountsone for you, one for your partner, and one joint fund. Once you've determined the
total cost of your shared living expenses, both of you should contribute your portion of these
costs to the joint account each month, based on your share of household income. (For
example, if you make $60,000 and your partner makes $40,000, you're responsible for 60
percent of household expenses.) Whatever money doesn't go toward these costs stays in the
individual accounts, to be used at each person's discretion.

Extra Credit

Every woman also needs one credit card in her name only. If you become divorced or
widowed, an individual credit history will enable you to get a loan and open utility accounts
without leaving a deposit, and may even help you land a job (some employers check
applicants' credit during the hiring process).

Ties That Bind

After you marry, every asset either of you acquires is jointly held. That's why you both need
to be in sync on your long-term financial goals, from paying off the mortgage to putting away
for retirement. Ideally, you should talk about all this before you wed. If you don't, you can
end up deeply frustrated and financially spent. Discussing money with the man you hope to
spend the rest of your life with doesn't mean you don't love him. It means you love him

and

yourself.

Don't Hide Your Head in the Sand

A lot of women fall into the habit of letting their partner handle the money. If you are one of
those women, that's not your spouse's fault; it's yours. Your husband may be doing a fabulous
job with your moneythat's not the point. You need to understand the family finances and
weigh in on all decisions. The fact that women tend to live longer than men means they may
need to rely on the money longer and will also find themselves managing it at some point.
The longer you wait to engage, the bigger the surprises you may find down the line.

Next: How to manage a financially controlling spouse

More Advice from Suze

How to avoid the common emotional pitfalls of mixing family and money
Get the 411 on your 911 fund
7 deals you should never make
9 small financial steps that will pay off big in the future
Your money blueprint for 2011

Ask Suze your questions about debt & saving money

Suze Orman's most recent book is Suze Orman's Action Plan: New Rules for New
Times (Spiegel & Grau).

Please note: This is general information and is not intended to be legal advice. You should
consult with your own financial advisor before making any major financial decisions,
including investments or changes to your portfolio, and a qualified legal professional before
executing any legal documents or taking any legal action. Harpo Productions, Inc., OWN:
Oprah Winfrey Network, Discovery Communications LLC and their affiliated companies and
entities are not responsible for any losses, damages or claims that may result from your
financial or legal decisions.

Three Methods for Co-Mingling Money as a Couple

How to share finances without resentment

Some couples co-mingle every bank account, retirement fund and credit card. But that's not
the only way you and your partner can combine household bills.

Merging your finances isn't an all-or-nothing idea. Couples can choose from many methods.
Let's take a look at some examples.

The Proportional Method

Couples who use the "proportional method" to co-mingle their finances each chip into the
household bills at a rate that's proportional to their income.

Example: John and Sally

John earns $2,000 per month, which is 33 percent of their household's total income. Sally
earns $4,000 per month, which is 66 percent of the household's total income.
The couple spends $3,000 per month on their household bills, such as their mortgage, utilities,
groceries, and one-twelfth on their annual expenses such as their property taxes.

John earns 33 percent of the couple's combined income, so he pays 33 percent of their $3,000
monthly bill, which equals $1,000.

Sally earns 66 percent of the couple's combined income, so she pays 66 percent of their
monthly bill, which equals $2,000.

Pros: The main advantage is that neither partner feels the pressure to "keep up with" or
"budget down to" the earnings of the other partner. In other words, their income disparity
doesn't cause a lifestyle clash.

The couple also enjoys a "middle-ground" stage of co-mingled finances. They share
household bills, but they also keep separate money for themselves as individuals.

Cons: The main disadvantage is that the higher-earning partner might start to feel resentful or
might start to feel like they're being "penalized" for earning more.

The Raw Contribution Method

Couples who use the "raw contribution method" each chip in the same raw number, regardless
of how much they make.

Example: Danny and Kate

Danny earns $3,500 a month. Kate earns $5,000 a month.

Their household bills come to $4,000 per month. They each chip in $2,000 and keep the
remainder of their money in separate accounts.

Pros: The higher-earning partner doesn't feel "penalized" for their success, and the lower-
earning partner doesn't feel "subsidized.

Cons: They need an agreement about what to do if one partner's income drops to zero (for
example, if one partner loses their job). Their relationship could become strained if Kate lives
a more glamorous lifestyle than Danny because she has more "fun" money leftover after
paying the bills. Some couples also criticize this method as feeling too "roommate-like."

#3: Complete Co-Mingling

Couples who completely co-mingle their finances combine their bank accounts, carry only
joint credit or debit cards, and list each other on their investment funds.

Example: Devon and Hilary

Devon earns $3,700 a month; Hilary earns $2,600. Both paychecks get direct deposited into a
joint checking account, which the couple uses to pay all their bills.

The couple also carries joint credit or debit cards, which they use to pay for all of their
purchases, regardless of whether it's a household purchase (like a microwave) or an individual
purchase (Hilary spends $100 a month at the hair salon, while Devon likes to collect baseball
cards).

Pros: They unite as a single unit - "we" rather than "you" and "me." Neither partner keeps
"score." If one person's income rises or the other person's income falls, they'll balance each
other out. Record-keeping also becomes easier.

Cons: The higher-earning partner can resent the lower-earning partner for spending his/her
earnings, especially if one person tends to be a spender while the other tends to be frugal.

Conclusion

There's no single best practice for co-mingling a couple's money. The most important thing is
to realize that there are many methods you can use.

You and your partner should weigh the pros and cons of each strategy to decide which
method feels best for you.

Once you choose a method, don't be afraid to tweak it or change it. You and your partner may
need to experiment with different strategies before you find the "perfect balance" between
your individual money and your couple money.

The Complete Money Guide for Couples

Financial Resources for Unmarried, Married, and Divorced Couples

This money guide for couples contains three sections of dedicated financial and money-
related resources to cater to all types of couples. You'll find here articles to suit the money
needs of unmarried couples, resources with financial advice for married couples, and even
sections dedicated to money advice for divorced or divorcing couples.

Money Guide for Unmarried Couples

Personal Finance for Unmarried Couples

Millions of unmarried opposite-sex couples live together in the US.

These single couples face unique money issues, and are less likely to plan for their financial
future than married couples. Here are the top three personal finance issues facing unmarried
couples living together.
Don't Date Your Way Into Debt
Dating is expensive. If you're single and seeking the company of the opposite sex, you can
kiss a lot of money goodbye before you find Mr. or Ms. Right.

Marriage: Tying the Financial Knot

So you're getting married? Have you sat down with your fianc and discussed finances?
Disagreements about finances is the number one cause of divorce, so getting these issues out
in the open and coming to an understanding before marriage can greatly increase your
chances of staying out of divorce court.

What You Need To Know About Buying a Diamond Engagement Ring

Is a diamond a good investment? How much should you spend on an engagement ring?
Should you surprise her or choose a ring together?

What can you expect to pay for a diamond engagement ring? How can you buy a beautiful
engagement ring for less?

Plan An Affordable, Memorable Wedding

The average wedding in the US costs over $23,000 (not including the honeymoon)! Imagine
what you could do with $23,000 as you start out your new life together, like making a sizeable
down payment on your first home.

You can have a beautiful, memorable wedding for less.

Wedding Budget Worksheet

Take control of your wedding costs with this wedding budget worksheet.

Personal Finance Advice for Married Couples

Financial To Do List for Newlyweds

Many newlyweds are 30-something and are combining households and finances. Whether
you're 19 or 90, there are a number of financial items that should be on any newlywed's To
Do list after the excitement of the wedding dies down.

Couples and Money: How to Talk the Talk

It's been estimated that money issues are the driving force in 90% of divorces, but you CAN
live happily ever after, financially speaking, if you work at not letting financial issues come
between you and your partner.

The Family CFO: The Couples Business Plan for Love and Money
The Family CFO takes a novel approach to personal finance among couples by teaching them
to apply the same principles they use at work to their money lives.

Joint or Separate Checking Accounts?

These days, it's not necessarily a given that newly married couples will merge their individual
checking accounts into one joint account. Finances are often complicated by previous
marriages, child support or alimony, student loans, existing mortgages or credit card debt, and
other issues such as a sense of autonomy and financial independence.

Sometimes combining all income into a joint checking account can muddy the waters, add
confusion and complications, and cause resentment and power struggles. So, what's a couple
to do?

Can You Afford To Have Kids?

Financial experts say a home is the biggest investment most people will ever make, but they're
forgetting about the cost of raising children, which far exceeds the average home price in the
US. The changes that accompany adding a new little member to your family can be stressful,
but you can reduce the stress greatly by minimizing the financial factor.

You Can Afford To Stay Home With Your Kids

If you or your spouse want to stay home and raise your kids, but think you can't afford to,
you're not alone. But you may be mistaken in thinking that you couldn't get by on one salary.
More and more women (and men) are finding creative ways to enable one parent to stay
home.

Dollars and Sense for Kids

Kids don't learn about money by osmosis. They don't magically learn to become financially
responsible. Nor do they usually learn sound personal finance practices in school. How will
you teach your children to be more financially successful, avoid living from paycheck to
paycheck, and steer clear of crippling credit card debt?

Financing Your Kid's College Education

If you're the parent of a newborn or young child, the cost of four years in a public college by
the time your child is 18 is expected to cost in excess of $100,000; a private school, over
$200,000. What's a parent to do? Learn how to prepare for the $100,000 price tag.

Personal Finance Advice for Divorced or Divorcing Couples

Suddenly Single: Dealing With the Financial Issues of Death and Divorce
The death of a spouse or a divorce is a traumatic experience that can shake the very
foundations of your life. In the midst of dealing with the grief and pain of the loss of a loved
one, what pressing financial matters do you need to address?

Dealing With the Financial Impact of Divorce

The true cost of divorce is its effect on the family, but it's also very costly financially.
Knowing your rights and obligations, and how to protect yourself, can make it less expensive
and perhaps a little less painful.

Financial Issues of Divorce

Advice on dividing property and debt, child support, alimony, taxes, and retirement funds in a
divorce.
Collecting Child Support
Who is obligated to pay child support? How do you get a court order? How do you collect
unpaid child support? What if your ex lives in another state? Find answers to these and other
questions about child support.

Dividing Retirement Plan Assets in a Divorce

Learn how a Qualified Domestic Relations Order (QDRO) can protect your rights.