Starting Out

The Money Minute is brought to you by Mary Hurlburt, the Director of Community Outreach.

April 21, 2008

My 40^th wedding anniversary is approaching, and my first wedding invitation of the season arrived last week. That, of course, led me to think about how times have changed and to remember my mother begging me to forego the fairytale wedding for a cash gift that would enable us to purchase our first home even before we married.

Did I take her up on her offer? Of course not, but 40 years later I sure wish I had. Memories fade and others had bigger and more elaborate weddings. However, the house we purchased three years later still stands today. It just goes to show that a house is a good investment. We purchased it for $18,300 and it went on the market last month for $175,000.

My best advice for today’s young couples is to have your financial affairs in order before you walk down the aisle. Discuss your attitudes about money and your hopes and dreams for your financial future. Be prepared to make some compromises but create a financial plan and stick to it.

Here are some general guidelines for young couples just getting started: 

• Track spending. For one month, write down every single penny you spend. Then jointly decide what to cut.
• Build an emergency fund. Set aside three to six months of living expenses in case catastrophe strikes. There is, after all, no job security these days.
• Start a “set-aside fund” for expenses such as vacations, taxes and car repairs. Rely on this fund instead of credit cards.
• Eliminate credit card debt. Begin now to pay the balance in full every month. If either party is already carrying debt, start now to pay it off. What better gift to give each other than to start married life unencumbered by debt?
• Review insurance coverage. Make sure coverage is adequate for all insurance needs including life, health, disability, renter or homeowner, and car.
• Organize financial documents and be sure each partner knows where they are kept. Basic documentation includes checking accounts, retirement accounts, loan statements, credit card statements, tax information and returns, investment and savings accounts, insurance, medical records, and any estate planning records.

When you’ve covered all this, then it’s time to plan for that dream wedding!

Mary Hurlburt is the Director of Community Outreach at the Consumer Credit Counseling Service. Do you have a question for Mary? Email her at mhurlburt@cccservices.com.