Managing Money and Staying Married

Author Steve Pybrum took questions on Thursday, April 5, on how couples can manage their money to keep their marriage healthy.
WEB EXCLUSIVE
Newsweek
April 9, 2007 issue - When two people are combining their lives in wedded bliss, it's not all about romance. They are also combining finances and sharing the burden of sometimes conflicting spending habits. According to interviews with divorcing couples, 75 percent split up over financial issues. But accountant and author Steve Pybrum says that doesn't have to be the case if couples are willing to honestly discuss their financial situations and expectations. Pybrum says people need to lay their cards on the table before they walk down the aisle, and work on their financial well-being just as hard as their emotional well-being to avoid some of the major pitfalls that couples face when balancing their mutual check book. During an hour-long Live Talk on Thursday, April 5, author Steve Pybrum took questions about his book "Money and Marriage: Making It Work Together" and on helping couples navigate the financial landmines of marriage. Read "Love by Numbers"
Columbus, OH: I have always dated men who didn't make any money and now I'm dating someone who makes a lot of money and it makes me uncomfortable that he is always paying so we can do the things that I couldn't otherwise afford to do. How should we deal with this so I don't feel like a golddigger even though it doesn't bother him to treat me?
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Steve Pybrum: Hello Columbus, you have a very complex situation that may/will need some professional counseling to make you feel great about this new relationship. Because of your past choices you have selected men who did not have high earnings-- now that you found one... this part is a good thing!! But having healthy feelings about this relationship is necessary or your are going to drag this guy down to where he feels like he needs to date someone else that is better adjusted and feels worthy and is a person that feels welcoming to the idea of success. The hard answer is that your poverty mentality and somewhat low self esteem cause you to feel uncomfortable with the very old tradition of the man treating. The good news is that it sounds like he can afford to treat. He is treating and he needs to feel like you appreciate his generosity. So you need to get into a position of being able to accept in a healthy way his generosity. It’s a tall leap for you and I would strongly recommend a marriage and family counselor who is familiar with these issues. A professional who can offer to be helpful to you and prepare you correctly for this new relationship.
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Bossier City, LA: Do you think these legitimate debt management agencies, that make payments on your behalf every month to your credit card companies, are beneficial in helping people get out of debt?
Steve Pybrum: Hello Bossier City Credit counselors and debt management experts have all come under recent scrutiny. You need to be watchful that these agencies are working for you with you best interests in mind and they should not charge any form of ‘up-front’ fee. It usually is a pay as you go situation. Yes, they can be helpful to people that do not understand the steps of debt consolidation and then retiring the past due debt. Many people across America are in a ‘debt’ situation in their own household and the problem is bigger than they know how to deal with. So try the agency and monitor results and make promises to yourselves not to get behind and ‘in-debt’ again.
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Tampa, FL: My boyfriend makes significantly more money than me but when we get married I don't want him to feel the pressure to be the sole breadwinner. My career, however doesn't cap nearly as high as his. Is there a way I can balance the financial burden more so that I feel I am financially contributing?
Steve Pybrum: Hello Tampa Your need for control is past your ability to earn in this case. It appears that for now the reality of your relationship is that husband is the breadwinner. You should do what ever you can do to make him feel emotionally supported and appreciated. Then you can work at your own pace in the direction and in a business where there is a realistic chance that your earnings can surpass his. Then you can feel the glow of being the breadwinner and your household wins because you will have a lot of money coming in. But whoa, having a lot of money coming in is not going to make for you a great relationship. The great relationship will come if you both work as a team, as a married couple and applaud each other for what they are able to do in reality and not feel that you need to out do husband which may cause you to do some naughty things emotionally to him to put him back in his place. Best wishes for a great relationship and a strong financial future.
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Los Angeles, CA: A previous wife and my husband owed a $12000 debt. The previous wife claimed bandruptcy and now my husband has to pay the whole debt. The divorce agreement said she would pay it. Which is correct?
Steve Pybrum: Hello LA The X-wife filed bankruptcy, a Federal right. I assume that she did this after she signed the final divorce documents and the marital settlement agreemen. You must seek the advice of a bankruptcy lawyer to find the answer to your question who can carefully look at all the documents and promises, likely if she has named the X-husband as a creditor and has named the creditor in question in her bankruptcy papers, by Federal Law. She is off the hook and likely husband has gotten caught holding the bag and will have to pay the entire amount of the debt?.
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Bradenton, FL: In your experience, how can a divorce be avoided when the woman makes much more money than the man?
Steve Pybrum: Hello Bradenton 25% of the women in the workforce make more than the men they live with and these women like this idea. And very few of them gloat about it. And in fact most of them try to keep this from becoming an issue in their relationship. But this is hard on the male ego and the man often slows down in his work and his quest for success because she makes so much more. And it this slowing down and not moving forward in earnest that will make this successful woman angry. So the best thing to do is to talk about the matter set some achievable goals together and above all the man must forge ahead to do good for the wife, the family and the preservation of a lifetime relationship. Your question though infers that you are only going to put forth an effort just enough to keep from getting divorced. This is not advisable.
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Chicago, IL: My girlfriend has $50,000 in student loans that cannot be consolidated further. She is 37 years old. Would I be responsible for this debt, too, once we are married? Is there anything she can do to get out of debt quicker? She's still only paying interest on the loan now at $500/month.
Steve Pybrum: Hello Chicago Student loans. The theory is that you go deep in debt at a low interest rate with deferred payments to secure a good job so that you can repay these loans. At 37 she has a lot of years remaining to retire this debt and often times professionals of all kinds are deeper in debt with an amount greater than $50,000 in student loans when starting their professional career. The quick answer is that no you will not be responsible for her debt unless you are a signer on the student loan promise to pay. You can insulate yourself for sure about this by having a pre-nuptial agreement. This type of agreement is talked about in detail and a sample of what it could look like are in my book “Money and Marriage for Engaged Couples.” The prenuptial agreement is a useful tool and should be considered by everyone before entering marriage.
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Orlando, FL: My fiance and I both own our own homes. They are both valued at around $170,000, with $80,000 mortgages. We would like to buy a larger home together, but are confused about what to do with our current houses, given the uncertainty in the housing market in our area. Our accountant has advised renting at least one of the houses in order to increase our tax deductions, and we would probably sell the other to use the capital for a downpayment on a larger house. Given our two financial goals - first, to increase our tax deductions, and second, to generate funds for a downpayment on a larger house, would it make sense to refinance the rental to take equity out of it to use towards the downpayment, then pay down the mortgage when the second house is sold?
Steve Pybrum: Hello Orlando It seems the accountant offered some good advice... You will build your financial net worth if you own real estate that is other than your home....if you plan to sell both houses you would want to plan with the accountant to utilize your 500,000 of profit forgiveness on the sale of the two houses...by renting the one house you may have converted it to investment property and may next have to exchange this house for more rental property if you ever want to sell...keeping the rental and re-financing and over time paying down the mortage while moving into a bigger house is also a good idea...you need to have a note pad and map out the various scenerios and then one clear path will soon make sense to you... Keep the accountant in the loop to explain the tax consequences of each move you make. All the best!!
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Boston, MA: Is it okay if one person in a relationship has good credit, and the other person has zero credit?
Steve Pybrum: Well, one person having good credit is a plus and you want to do what you can to keep this persons credit unblemished. The other person you need to find the root of the problem as to why there is bad credit and first fix the problem and then go to work on cleaning up the credit report so that both of you move in the direction of having good credit. Having a pre-nuptial agreement or a post nuptial agreement will prevent the credit reporting agencies from putting negative information in the credit file of the person with the good credit.
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Boston, MA: What do couples fight most about when it comes to money?
Steve Pybrum: Well, when there is one man and one woman and the meeting is called to discuss your finances...sparks fly...
Chiefly it is because the couple has never taken the time to sit down to get to know each other so that they for themselves can understand the gender difference issues between each other and also coming to an understanding in how each other was raised as a child is an important part of the mix leading toward a healthy discussion about the finances of your married household.
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Houston, TX: If wives do not work, should they be given an allowance or is that demeaning to the work they do for the household?
Steve Pybrum: Well the non working spouse needs to have some money...that is clear and the presumption was that the working spouse would supply the money for the working persons earnings...most households of this kind come to a financial understanding as to how much it takes to:
1. run the household
2. general spending money for the non working person
From there it would require good communication skills to ask for more money from the working person for needs beyond those that had been planned for.
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Rochester, NY: Joint checking account or separate accounts? Which is better for soon-to-be marrieds?
Steve Pybrum: Younger people today are finding it more comfortable to have a combination of:
his account her account and a joint account.
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Upper Saddle River, NJ: How can you disuade a spouse from spending so much on non-essential personal items?
Steve Pybrum: This is a question that every man in America has!! The answer lies in how well you have planned your finances together...if you have had little or no discussion then the sky might be the limit in how far the non essential spending may go...if you have a frank discussion and put a lid on monthly spending for things in the non essential spending category then you may be able to limit the amount to a certain do not exceed amount per month...but for the female to outlaw such spending would cause the female to become upset.
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Chicago, IL: Is it important for both members of a couple to contribute equally to their respective 401(k)s?
Steve Pybrum: Often different contribution percentages exist for married couples....some say take 2% of my salary and reduce it and others want the maximum contribution...the max contribution people are the serious savers and have building their fianancial net worth and a sane retirement in mind the 2% are doing so only so they can say that they have a 401K..
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Los Angeles, CA: My husband and I have been married for 6 months, should we get wills?
Steve Pybrum: Hello LA Hopefully things are going well in this new marriage and you wont immediately need to have a will. But because you are married and trying to do things that will put your household in a well-kept position it would be advisable to have a will and the need increases as you own real estate together or have children or as you increase in years.
Because you are in a relatively new marriage you might want to look at my book "Money and Marriage-Making It Work Together" as there are many powerful ideas in how to run your household in a healthy and prosperous way, creating what you want to have...a great relationship and a strong financial future.
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Galveston, TX: Do married people need to get Powers of Attorneys in place for one another?
Steve Pybrum: This is similar to the question about do I need a will...today if you go to an attorney to get a will drafted likely the lawyer will have a discussion with you about having a revocable living trust instead of a will...with the revocable living trust then comes a whole package of things which would include the power of attorney over the other person should they become incapacitated and the "pull the plug" medical condition decision documents will be included in the same package. You should visit an estate planning attorney to have an initial discussion to determine what you needs are.
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Chapel Hill, NC: Is there an advantage to filing married jointly or married singly?
Steve Pybrum: Hello Chapel Hill....married single allows you to use the hightest tax rates in the land....married filing jointly likely will produce a result that causes you to pay less income tax...its really you decide on this one.
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Madison, WI: Is there still a marriage penalty for married people with no kids?
Steve Pybrum: The marriage penalty still exists and everyone should write their congressperson to fix this problem....Congress should be providing an incentive to get married and stay married...but presently the marriage penalty arises because if married persons divorced and filed as single people the way the math works out you would pay less tax...and this is not fair to members of the marriage community.
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St. Paul, MN: If one spouse is much better at managing money then the other, how should that be handled?
Steve Pybrum: This is the essence of 70% of the married households...there is a person that is fiscally more sound than the other person...this does not mean that the non fiscal person can run wild with the check book, it means that the fiscal person has to chat with the non fiscal person and live within certain boundaries because by doing so you will be building together a stronger financial future.
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Boulder, CO: I heard that everyone who gets married should sign a pre-nup, even if they are both broke, or financially equal at the start of the marriage. Is this true?
Steve Pybrum: Everyone who decides to get married should consider a pre nuptial agreement, even if they are both broke and even if they have just graduated from college. The prenuptial agreement gives you the chance to make your own rules and then you will not encounter rules from 1955 in the event the marriage ends in divorce. The pre nup agreement is a very helpful tool and can be designed in a way that it is fair and it promotes the idea that we are in this together. The agreement can foster the idea that the marriage is designed to last a lifetime.
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Chicago, IL: My boyfriend makes more money than I do and probably always will. We've discussed a pre-nuptial agreement and I've agreed that we should have one, but I feel I should have the right to negotiate it to protect myself and not just his money. How do I do this?
Steve Pybrum: A good pre nup is balanced and fair and does not put anyone in a awkward position if it were needed to be utilized, that is in the event of a divorce....its a 50-50 chance and you have an opportunity to design a way to combine your finances and purchase joint things together and unravel things if need be without a lot of legal wrangling.
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Sheboygan, WI: I am considering remarrying. I am a home-owner, but my bride-to-be has no real estate. How should we structure our finances, so I protect my equity while still showing her how much I love her?
Steve Pybrum: Men wake up...the house is a very special place for the female and to try to cut her out of the house and its equity is not really a good idea!!
But if you could explain that we are starting marriage today and now there is 50K of equity and from this day forward any additional equity because of our marrige will then be 50-50 equal earning of equity beyond the original equity amount of 50K.
If you want the female to be really happy you would live in "your" house for a short while and be working in the direction of buying "our house" in the not to distant future.
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Dedham, MA: After your marriage, how long should you wait to combine checking accounts and savings accounts?
Steve Pybrum: Immediately! Newlyweds, on average, wait 2 weeks to 2 1/2 months after their honeymoon to discuss finances. It is ultimately your personal decision as to whether you wish to create a joint checking account, but if (as it seems) you are already planning on doing so, there is nothing but yourselves that holds you from making the proper and necessary steps toward a joint checking account right away.
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Amarillo, TX: My wife won't let me see our household check book. She handles all the finances. How can I talk her into letting me see how much we're spending?
Steve Pybrum: Communication is more often than not the foundation of every relationship situation. If you express and show interest in and desire to participate in the financial goings on of the married household, it will behoove your wife to include you in the household check book. The best way to approach her is in a calm manner, a neutral arena and with sincerity and the notion of dual betterment. You are the second half of a whole and you wish to ensure the finacial survival of a long, healthy and wealthy marriage.
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Bellevue, WA: My husband has recently converted all of our check paying to online. I am not familiar with all of his passwords. How should I introduce this rather delicate topic so that I could deal with an emergency should he be out of town.
Steve Pybrum: Husbands and wives will always have their personal space, but the necessity to maintain the financial safety of the married household is a priority. This is why couples have created joint checking accounts. If one checking account is to continue as status quo, then calmly, openly and delicately discuss the necessity of knowing accessible measures for the finacial livelihood of the married couple. You are a team. Be team players.
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Arlington Heights, IL: My husband doesn't share his finances with me at all. It drives me crazy but he refuses to talk with me about it. We haven't had any major problems, but shouldn't a married couple have full financial disclosure or does he have the right to keep his finances private?
Steve Pybrum: "Money and Marriage: Making It Work Together"
The answers lie within...
Sharing financial information is just as necessary as sharing personal thoughts and emotions... especially as thoughts and emotions are often linked to finances. The path to a healthy and wealthy marriage lies in open and honest communication about finances. If you show interest in the betterment of your financial future together, then there should be no reason for your husband to keep the household finances a secret. If you need to learn the "tricks of the trade" when it comes to finances, then show and prove your determination to help the married household further its path toward health and wealth.