Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, June 4, 1990 TAG: 9006020006
SECTION: BUSINESS PAGE: A5 EDITION: METRO
SOURCE: MAG POFF BUSINESS WRITER
DATELINE: LENGTH: Medium
The Virginia Society of Certified Public Accountants called financial management one of the most divisive questions facing newlyweds.
But there is no need for money to mar a marriage. A little advance planning can produce fiscal harmony for as long as you both shall live.
The most important step, according to the Virginia CPAs, is to talk about money. You should discuss your feelings about money, not just dollars and cents.
What does money mean to you? How comfortable are you in dealing with money matters? How much money, in your mind, would make you feel financially secure?
Don't just talk about your finances as they exist today, the society said.
Talk as specifically as possible about your long-term goals.
If you want to save for a down-payment on a house, for instance, try to agree on the amount as well as on the time frame.
If you cannot settle on a single set of goals, the society advised, list both your common goals and your individual priorities.
Another basic question, according to the accountants, is whether to merge financial assets.
Although most couples choose joint accounts, the society said, there is no "right" answer.
Another option is separate accounts, with each partner taking responsibility for particular expenses.
Still another is setting up a joint account for mutual living expenses, keeping two other separate funds for individual use such as clothing and hobbies.
J. Patrick Budd, a certified public accountant in Roanoke, said the decision usually depends on the situation of each couple.
When the partners are young and have few assets, Budd said, the usual practice is to consolidate finances from the beginning of the marriage.
The older the pair, the more likely they are to segregate their accounts.
If they are financially established, with assets and perhaps children on both sides, he said, the financial arrangements are more likely to be business-like and formal.
He knows of couples who pay higher tax bills because they want to file separate returns.
Budd said estate planning becomes a major consideration in setting up the financial affairs of later-life marriages.
The Virginia CPAs advised any couple opting for a joint account to set a limit on how much each partner can withdraw without mutual agreement.
Newlyweds must also allocate responsibility for managing money records based on the preferences, abilities and schedules of the spouses.
Once the accounts are set up, the society said, you should create a budget. Work with the budget until it fits your lifestyle because you won't follow a plan that's too rigid.
Don't forget to budget for regular savings toward your agreed-upon goals.
If your income won't cover expenses plus savings, the accountants advised, it's time to be more realistic. That means controlling the amount you spend on such discretionary items as entertainment and clothing.
Newlyweds should take three other financial steps, according to the accountants.
The first is to provide adequate insurance coverage.
Life insurance is an important consideration, especially if you plan to have children.
But couples should also have either renter or homeowner protection, disability coverage and, if it's not provided at work, health insurance.
Wills are another need. Couples should agree on how they want to distribute their growing assets in case one or both should die.
Finally, try to determine how the marriage will impact on your tax liability. You may want to adjust your deductions or quarterly payments to meet your new status as husband and wife.
by CNB