As Alfredo A. Lopez, 31, approached his first anniversary, he noticed that he and his new wife, Edith, also 31, were spending more than he was comfortable with each month.
In an effort to gently address the problem, Alfredo decided to bring up the tricky topic using an unconventional approach: He jotted down some financial goals that he and his wife could strive for together, such as more conscious spending and eliminating credit card debt. He even tried to be lighthearted at one point, showing Photoshopped pictures of his wife in Paris, holding wads of cash, to illustrate what they could do if they saved more.
Unfortunately, Edith's reaction wasn't at all what Alfredo was expecting.
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"I saw her shutting down," says Alfredo, a social media and content marketing manager. "The more I talked, the more she seemed to get upset."
The Lopez newlyweds aren't alone.
In fact, one Kansas State University study found that if couples argued about money at the beginning of their marriage, they were more likely to report poor relationship satisfaction in the long-term. This is precisely why experts say it's key for couples to tackle money issues early—to stave off fights over finances in the future.
So what are the most common financial blunders that newlyweds tend to make? We asked financial pros to pinpoint the eight biggest offenders—and then offer up some advice for how to help right them early on.
Newlywed Mistake #1: Not Knowing Your Partner’s "Money Story"
How each partner feels about finances is often shaped by their experiences with money growing up. And knowing what that history is can give you a greater understanding of your significant other’s attitudes toward money—and help clue you in to sore spots, says Brad Klontz, CFP® and coauthor of “Mind Over Money.”
Klontz gives this example: Let's say one spouse grew up poor and was constantly told by his parents, "We can't afford to eat out." As a result, he may like going to restaurants because it makes him feel wealthier. So every time you say the same thing, it's an emotional trigger that causes him to want it even more, leading to a fight.
But when you understand the root cause of your spouse's behavior, you can avoid using "trigger" phrases, and instead address the issue in a more compassionate way by asking questions like, "What did you learn about money as a child? And how could it be influencing your decisions now?"
A little money conflict isn’t a bad thing. Couples who don't have a fight over money are the worst when it comes to financial infidelity.
It's an approach that finally worked for the Lopezes. "Rather than confront Edith with everything at once, I'd ask her one money-related question at a time every now and then," Alfredo says. "And I made each one about her." He'd ask: Where would you like to travel in the next couple of years? When would you like to retire? What kind of job do you see yourself doing in the next 10 years?
As a result, Edith finally opened up, and the couple was able to talk about money more freely. Four years later, they are out of credit card debt, automate their bills, save for retirement and put aside 10% of their income for other goals.
Newlywed Mistake #2: Harboring Financial Secrets
You want to keep a little bit of mystery in your relationship—but not when it comes to money. "People aren't always honest about their financial situations," says Klontz. "There's never a good time to tell someone you have $10,000 of credit card debt."
But hidden facts, like poor credit, will come out when a couple tries to apply for a mortgage or car loan or get a good interest rate. And such a revelation can come as a huge shock, making someone think, "If my partner didn't tell me about this, what else is my spouse not telling me?"
In fact, keeping money secrets can be worse than arguing about it. A little money conflict isn’t a bad thing, says Bonnie Eaker Weil, author of “Financial Infidelity: Seven Steps to Conquering the #1 Relationship Wrecker.” “It's good because you're talking it out. [Couples who] don't have a fight over money are the worst when it comes to financial infidelity.”
Newlywed Mistake #3: Avoiding Big—and Little—Money Talks
Bills, credit scores, debt, savings, retirement, future goals for your money. There are so many financial topics couples should be addressing together—and yet generally don’t.
So Weil suggests prioritizing each financial issue and goal on paper together. For instance, should paying down the student loan that carries higher interest trump the loan with a lower rate? Is paying off your car more urgent than funding a dream vacation? Is there anything you need to consider getting a postnuptial agreement for? This exercise can help you and your partner prioritize what's most important to both of you as a couple.
And both Weil and Klontz suggest having regular, scheduled money talks—be it weekly, monthly or quarterly. And do something to make the meeting fun. "My wife and I go to our favorite coffee shop," Klontz says. "Talking about money is a difficult thing for most of us, so making it something that you look forward to helps."
Newlywed Mistake #4: Not Helping Each Other Stick to a Budget
Even if you and your partner have been talking about money regularly, discussing a financial game plan is simply the first step—now you have to follow through.
Weil suggests creating ground rules to keep yourselves accountable to each other. For example, consider making a pact that if one of you increases your retirement contributions, the other spouse must do the same. Or choose a dollar amount—perhaps somewhere between $50 and $100—and agree that neither of you can make a purchase larger than that sum without checking with the other spouse first. This way, nobody can splurge recklessly or impulsively.
Most newlyweds want to enjoy some alone time first, but whether—and when—you have kids will affect several important financial decisions.
Another way to both work on staying in budget? Sit down and choose which bills to automate together, so that you won’t be tempted to spend money on other things. You may decide, for instance, that you want your monthly insurance premiums to transfer directly from your joint checking account, but you’d like to pay your electric bills with a check, so that you can keep track of your energy usage together.
Newlywed Mistake # 5: Thinking It’s Too Early to Discuss Children
Most newlyweds want to enjoy some alone time first, but whether—and when—you have kids will likely affect several important financial decisions, such as the type of home you buy, the neighborhood you choose and whether you’ll be a dual- or single-income household once the little ones arrive.
"You may discover that you need to make some big decisions now, such as looking for a higher-paying job or moving to a less expensive area [to start saving up for kids]," Klontz says.
Another source of conflict, says Klontz, is when one person already has kids. Blended families often require a host of financial decision-making—both large and small. Should both of you chip in for child support, or only the biological parent? How much should be spent for expenses like birthday gifts, braces and college? Even small purchases could be sensitive topics, so it’s better to set expectations early on.
Newlyweds should also consider consulting an estate attorney if either spouse has children from a previous marriage and a lot of assets that may need to be split up between family members. Having your trust and estate documents set up now can help save a lot of headache—and family arguments—in the future.
Newlywed Mistake #6: Believing You’re Invincible
If you’re young newlyweds, you’re probably not thinking about death. But the truth is that you never know when disaster could strike—and getting your ducks in a row now could help save your spouse a lot of hassle and distress later.
This means creating a living will (which is your health-care directive, should something happen to you), appointing a power of attorney, designating beneficiaries on your retirement accounts, and putting a partner's name on any individual bank accounts.
These measures are designed to give your spouse immediate access to your money, so your partner doesn't have to wait months for your estate to be settled.
Being prepared also means looking into life insurance policies. It may not make for the best pillow talk, but it’s often less expensive to get coverage when you’re young and healthy. "Life insurance is about covering your spouse and kids so they can maintain the same lifestyle," Klontz says. "Otherwise, that person loses you and then may also lose the house."
Newlywed Mistake #7: Not Acknowledging Cultural Differences
In the same way that childhood memories can shape financial behavior in adulthood, cultural differences can influence how we feel about money too. For example, your spouse may have grown up in a culture where it’s normal to financially support immediate or even extended family.
If you want to do your taxes in February, and you marry someone who'd rather do them in April, compromise on early March—and mark your calendars.
“What's appropriate in one culture may not be appropriate in another—and it can cause conflict,” Klontz says. “One person might ask, ‘Your brother wanted $200 and you just gave it to him?’ And the spouse may say, ‘Of course, why are you mad?’ ”
So think about making it a point to understand each other's norms and values early in a relationship, so you can figure out together where there will be boundaries.
Newlywed Mistake #8: Waiting Till the Last Minute to Talk Taxes
Now that you’re married, your tax filing status is changing. Translation: Any questions that you had before about paying Uncle Sam may have now doubled. While most spouses will be going from single to married filing jointly, it’s not just the filing status that brings change—it’s also how (and when) you plan to file.
You might talk to your partner months in advance to see what factors will affect your taxes, particularly your first year together. Might one of you be freelance or thinking about going the self-employed route? What deductions can you both still take now that your filing status and household income have changed?
And remember that, for tax purposes, you're considered married in the tax year that you were married. So if you got married on December 31, 2013, you and your partner would be considered married for the tax year 2013.
There’s also the matter of what to do if you usually file early, and your partner is a “run to the post office on April 15” type. If you're a planner who wants to do your taxes in early February, and you marry someone spontaneous who'd rather do them in April, you might want to compromise on early March—and mark your calendars.
LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc. that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. Unless specifically identified as such, the people interviewed in this piece are neither clients, employees nor affiliates of LearnVest Planning Services, and the views expressed are their own. LearnVest Planning Services and any third parties listed in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies.