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Financial Planning

The Martha Stewart Show, September 2008

A pressing concern that newly married couples face is figuring out how to set up their finances. Financial expert Jean Chatzky has some great advice for helping the bride and groom walk down the aisle toward a secure financial future.

Before getting married, couples should have a series of financial discussions. Couples are going to want to make decisions about where to live, when and if to have children, if both will work, how often to go on vacation, and when to retire. 

Although these may not sound like financial issues, every one of them is, because paying for these life choices is a challenge couples have to take on together. If you're not comfortable discussing how much you earn, how much you own, and how much you owe, then you have trouble in the relationship that needs to be hashed out before you get to the altar -- or, if you're already married, right after.

Unfortunately, many people get married with the incorrect idea that just because you're tying the knot you've become the same people with the same financial goals and ideas. That's totally off-base. Spenders tend to marry savers. Conservative investors tend to marry aggressive ones. Thus, it is hugely important for both spouses to maintain assets in their own names, in addition to creating a house account for joint expenses and joint savings.

It is particularly important for women to hold assets and establish credit in their own name; 95 percent of women will be alone at some point in their lives (due to divorce, the fact that women tend to marry later, and the fact that women outlive men), and thus need to know how to manage money independently.

When allocating their money, a couple should spend 35 percent on housing (not just your mortgage or rent, but the cost to maintain and insure it), 15 percent on transportation (not just your car loan but gas, taxis, and other commuting and maintenance costs), 15 percent on debt reduction (credit cards and student loans), 10 percent on saving, and 25 percent on everything else. 

If you live in a city like New York, spending just 35 percent of your funds on housing is tough; you'll have to find the money from another category. The only one you are not allowed to borrow from is savings.

Checking in with a financial adviser at life's turning points can be very helpful. Many people are reluctant to put another professional on the payroll, but you don't have to. There are many financial advisers who are now willing to work by the hour, which is a low-risk, low-cost way of figuring out if you're on the right monetary track.

It is important to fund your own retirement before you save for your children's college funds. This means you should max out 401k's or other tax-deferred retirement options. Why plan for your retirement first? Because there is financial aid for college; there is no financial aid for retirement. 

If you're going to insist on saving for college even though your retirement needs are not satisfied, put money in a Roth IRA where it can be used for college or retirement. You can make the choice at a later date. Once you are properly prepared for retirement, investigate the 529 state-sponsored college-savings plans. They're not all equal, but you can go to to find which ones are best.

And remember: It's important to confess any debt you may have to your spouse. If there is something you have been hiding, it will come out as soon as you apply for a joint mortgage or car loan.

Special thanks to financial adviser Jean Chatzky for sharing this information. For more information on Jean, visit To find a Wachovia Securities Financial Advisor location near you, visit For more information on how to make better financial decisions, visit

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