Marriage and Money: Expert Advice

--Wrap-up from expert chat: Love, Marriage and Money with authors Gail Liberman and Alan Lavine

Problem: Marriage and Credit History!
"I will be getting married in January, and have a question about how marriage can affect your credit history. I have a few glitches in my credit history, but my fiancé has a sparkling credit history. Will getting combined accounts and applying for credit together affect his history? We don't want to affect his record." --tiffste

If you decide to apply for a joint credit account, the lender will consider your income, financial assets and credit history as well as the income, assets and credit history of your spouse. So your ability to get a joint credit card, for example, could be hampered -- depending upon how serious your credit problems were and how strong your joint income and assets are. Keep in mind that different lenders have different standards.

Nowadays, credit card and loan rates also may be based on credit history. So if you apply for a joint account and you have bad credit, you need to consider that you both could wind up paying a higher rate than your spouse-to-be would, if he were to apply for the loan or credit card on his own.

With a joint account, you also both are liable for the bills -- even if just one of you did the charging!

Meanwhile, if you happen to live in a community property state, you may both be responsible for debts incurred in your marriage. So even if your spouse-to-be applies for credit in his own name, once you're married, your debts can appear on his credit report. Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Also: Puerto Rico.

Now for the good news. Most negative credit information can only remain on your credit report for a maximum of seven years from your last payment before an account became delinquent.

Check your credit reports to make sure your on-time payments are getting reported, and check that those blemishes are wiped out after seven years!

Problem: Marriage, House and Baby -- All at Once
"I am so impressed with my friend, but at the same time am worried for him. He met a gal, three months later she got pregnant and two months later they got married and bought a house. Now that I look at their situation, I'm thinking that it probably would be better if my husband and I did everything at the same time. I know, it's easier said than done, but it seems to be working for them. My question is, how will all the major events affect them in the long run with love, marriage and finances?" --chilifries

Everyone is different. Perhaps, if your friend was able to get a house and have a baby at the same time, money was not a major issue for the couple. Maybe your friend already had been saving money, and thus, the new house doesn't necessarily present a stressful situation. If they communicate well with each other and both are willing to give to the relationship and compromise, it's certainly possible that everything could work out fine.

It is true, though, that lack of money is a chief cause of arguments in relationships, and having a child definitely can put stress on a relationship. So, we give you a tremendous amount of credit for realizing early on the impact of these monumental events, and for coming up with a methodical long-term plan to relieve some of the chief stresses surrounding both. We also both can testify that when a husband and wife both work toward a common goal -- saving to buy the house you want or building a financial cushion for a child, it is that much more of a romantic and happy occasion when you finally achieve those goals.

Problem: Just Married and in Debt
"My marriage is fine when we don't discuss money. We have been married six months and are $100,000 in debt. My husband wants kids but my belief is we can't afford them. Can you advise me on how to get out of debt, not fight about money, adjust to the quirks of marriage, while planning on having kids?" --lorjune0625

We're glad you realize early the seriousness of your debt situation. It's the stuff -- if you're not careful -- that can lead to divorce. We urge you to immediately get your hubby to the kitchen table, and sit down with all your financial records. You both need to resolve to get rid of that $100,000 debt ASAP! Once you're sitting together, do the following:

1) Make a pact to stop using all credit cards immediately. You'll automatically spend one-third less.

2) Determine whether there's any way to transfer any of your high-rate debt to lower rates. Sometimes, for example, credit card companies offer special rates if you transfer balances. Make sure that you can pay the particular debt off, though, before that low rate expires.

3) Get your checkbook registers. Write down every single item you have spent money on for the month. Next, write down very item you have laid out cash for -- including coffee, donuts, candy, gum, soda, etc.

4) Once you have everything down on paper, read off each item out loud. Both of you take turns brainstorming on what items you can live without or can reduce the cost of. Do you really need that coffee every day? Any way you can bring your lunch to work? Maybe eat extra meals in, and so on. When you figure that out, add up the monthly amount of money you've just agreed to save and deposit the amount weekly from your paychecks in a special account to go toward added payments on the bills.

5) Each of you should volunteer to make a certain number of phone calls to shop for better deals on your telephone phone rates, electric and gas rates (are you really on the lowest cost plans?), insurance, bank accounts and any other fixed monthly costs. Also, evaluate whether you might be able to adjust coverages to cut your rates. (i.e. increase your car insurance deductible). Also, consider adjusting your usage of these services to take advantage lower rates, you might get a cheaper phone rate after 7pm and on weekends). Again, tally up the savings you realize monthly through this process and put away that amount of money in your account to pay off bills.

6) Take turns brainstorming how you might boost your income to overcome this debt. Can you take second jobs for a while, rent out a room, downsize your apartment or house, sell your home for a profit? Again, any extra money you bring in, immediately put in your account toward paying off your debts.

If you are unable to do all this, you might visit the non-profit agency, Consumer Credit Counseling Service (Phone: 1-800-388-2227 to locate one near you). This agency is likely to work with you doing similar things, and might be able to negotiate lower rates for you through some of your credit card issuers. There could be a slight fee for the service.

You are right to realize that having a child, while a blessed event, can put a stress on a marriage. It would be great if you both could take the bull by the horns and lay your debt -- evidently another major stress -- to rest first. By the way, an excellent and inspirational book for you to read is How to Get Out of Debt, Stay Out of Debt and Live Prosperously" by Jerrold Mundis (Bantam Books).

Problem: Unemployed Husband
I've been married almost nine years. When I first met my husband, I will admit I was a gold digger, but was smitten by me husband's romantic nature and totally fell head over heels in love.

Although my husband did not have a lot of money, he had an okay job and I was into my career so we were fine. But that only lasted a year and ever since then he has not held down a regular job. We have two children and I work 50 hours a week. My husband is not working at all right now and hasn't since December 1998. I'm feeling he either has really bad job-finding skills, is too lazy to find a job or is taking advantage of me. How much do I tolerate? My family has freaked out about it and wants me to leave him yesterday. I love him and want my children to have a father, but I also want them to have a good role model. Should I stick it out and hope he finds something or go looking for something better myself? I just want to be able to live comfortably, not extravagantly, and be able to pay bills with out living week to week." --lisadd99

You need to tune out all the noise from your family, and make up your own mind. What disturbs us is your lack of knowledge as to whether your husband's jobless situation is due to bad job-finding skills, laziness, or the fact that he is taking advantage of you.

Sounds like before you can make such an important decision on the future of your marriage and family, you need to nail down that information. You need to sit down with your hubby and express your dissatisfaction with the status quo. Then ask him point-blank how he feels about his job situation. Is it due to the market? Is it because he lacks confidence? Or, is it strictly because he does not wish to work at all? Get him to express his feelings on the issue. Lack of self-confidence, not knowing precisely what he wishes to do and temporary laziness are understandable feelings that a lot of people experience now and then. Perhaps you can encourage him to seek counseling for the good of you and the family. Or, maybe, if he just needs some time off, and if you are convinced the situation is temporary, you can just live with it for a while. On the other hand, if it's clear he's merely taking advantage of you, you need to express your dissatisfaction with the arrangement and let him know of your need that he change.

Problem: Getting Him to Get a Raise
"My husband makes a decent salary. However, he is not being paid fair market value. He could easily go to a headhunter and find a job for 30 percent more than what he earns now. He likes where he is and enjoys the work. It's the perfect job for him, except that the top boss is beyond miserly and he's the guy who doles out the raises, bonuses, etc. I think my husband is being taken advantage of and let's face it, we could use the additional income he could be making. Should I express my views to him or would I be stepping over the line? " --cl-annejennifer

Absolutely. Express your views to your husband. If you don't it will fester and create tension. However, there's a right way and a wrong way to approach the subject.

Tell him you're having a problem that's bothering you so that he gets involved in trying to help you. You can say, "I'm depressed, because we need more money to live and I don't think you're being fairly treated by your employer -- even though I truly understand you like working there," might be a way to bring it up. Be sure to communicate to him that you understand how much he loves his job.

Problem: Tax-Time Chaos
My husband gets paid as a subcontractor, therefore he has to handle his own taxes. However, he doesn't always handle it and sends in less than what he has too. When April 15 comes, he's paying several thousand dollars to Uncle Sam. This stresses him out then he turns to me and says what can you pay? I have taxes taken out of my pay at my job and in my mind, I've paid my taxes.

As a wife I suppose I should be trying to do everything I can to help him out at tax time but part of me says, "Hey, if you took better care of your obligation throughout the year, you wouldn't be in this mess!" -- uzyq266199

Perhaps you can have your husband set up an escrow account at a bank, and have money taken out of his checking account each month to cover FICA and taxes. To start with, though, you need to sit down with him and express how unfair you feel it is that you, who already have paid taxes, must cover his taxes. Make certain you listen carefully to his response and determine exactly why he's not handling them on his own. Then, perhaps you can bring up the automatic savings plan as a solution.

Problem: His Debt Preventing His Proposal
My boyfriend is sketchy about getting married because in the past, the IRS seized his assets to repay some debt owed to them after his businesses failed. And I don't think he's paid them off totally yet. He has lousy credit in general and wants us to be able to buy a house in the future. I already own a condo. He keeps saying "if we get married we won't be able to buy anything and they'll come take your house because of my debt." Give me some ammo so that I can convince him marrying me isn't the worst thing in the world -- at least as far as his bad credit history is concerned! --jessamine


The million-dollar question here is whether your boyfriend is genuinely shunning marriage because of his financial situation -- which actually may be a positive sign of maturity -- or because he really does not wish to get married. If it's strictly the financial issues you list, perhaps you both can see an attorney who specializes in bankruptcy or family law to make certain your assets can be fully protected if you marry. State laws differ, so it's critical that you take this step and not rely on message boards.

Some avenues you might discuss with the attorney:
1.) Keeping all assets in your own name exclusively. 2.) A prenuptial agreement that protects your assets. 3.) Keeping credit cards in your own name. Caution: Although you can make your spouse an "authorized user" of your credit card account and get credit history on the card reported in his name, you might not wish to take that route if your boyfriend has not fully corrected his abuse of credit. Reason: You'll be responsible for all the debt -- including his!

It also is important that you be aware of exactly how much he owes. Then, perhaps, you jointly can figure out a way to pay it off and rebuild his credit.

Here's the ammo you requested: Your good credit actually could help him qualify for a mortgage on a house he otherwise might not be able to get.

Warning: Debt and credit problems are a chief cause of stress in marriages, so it's wise to seriously consider these issues -- before you tie the knot.

Problem: Too Broke to Divorce
I've been married for two years and have two boys. I really want out of this marriage but we are stuck in a financial trap -- that's why we stay together. We can not afford to get divorced. We barely get by as it is. I haven't worked in four years and have little college education. I worry most about my children and how I would be able to support them, the cost of daycare is tremendous. I feel like a caged rat, running nonstop on the wheel and never getting anywhere. --luvmyboysbb

We happen to be a little prejudiced against divorce for a few reasons -- aside from the fact that we happen to be happily married. As you seem already to have realized, there can be devastating financial consequences to divorce. Numerous studies also have indicated that married people tend to be healthier than single people.

Of course, the most serious issues are whether you love each other and are able to communicate. One thing to consider: Your children are at an age at which they're consuming all your time -- a factor that could be magnifying your hubby's negatives right now. If you're unsure about whether to split, perhaps it could prove a good idea to get a job that gives you a little time away from your husband. Or maybe you can split shifts, so that he stays home with the kids. Such an action would give you more time to think clearly, get your mind off your marital problems, help alleviate your financial problems and provide you with some of the confidence and skills you'll need if you do decide the marriage can't be saved. The good news is unemployment is at record lows, so we suspect you should be able to find work pretty easily. Also, if possible, target companies that might not require advanced degrees, but yet tend to pay better than others. For instance, Forbes magazine once reported that Costco tends to pay its clerks much better than most other companies and provides good benefits as part of its commitment to retain employees.

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