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Expert Advice from Financial Planners

According to DeFrate (far left) and Paavola, the best thing you can do as a couple is save. “The more you put away now, the better off you’ll be later,” says DeFrate. It’s easier than you’d think: “If you normally order lunch at work, start bringing it from home just twice a week. You’ll save about $50 a month, or $100 if you both do it,” says Paavola.
Martha Stewart Weddings, Spring 2012

Diana DeFrate and Katriina Paavola

Financial Planners

Known for
Helping couples alleviate debt while budgeting for the future
Where to Find Them
At ALTA Wealth Management in New York City (altawealthmanagement.com)

Money issues can be very stressful for newlyweds -- especially if one or both has personal debt. What's the best way to pay it off?
Katriina Paavola: Tackle your credit card balance first, since it has such high interest rates.
Diane DeFrate: And remember that you didn't get into debt overnight. Make a realistic plan for managing it, so you can save a bit at the same time. It's okay if it takes a little while.

Once you get it under control, what's the best way to keep it from creeping back up?
DD: You have to watch your spending. We recommend keeping a money journal for 30 days. Make two columns, "Wants" and "Needs," and write down every single item that you buy -- or track finances online with a service like Mint (mint.com). It will help you see exactly where your money goes. It's about discipline, not deprivation.

If a couple are paying for their wedding themselves, they're likely going to accumulate some debt. How much is okay?
DD: If you can pay off 50 percent ahead of time and 50 percent over the next 12 months, that's fine. The last thing you want is to have those bills over your head for years.

Do you ever recommend a prenup?
DD: Sure. If there's a huge financial disparity between the bride and groom, it's absolutely worth discussing.
KP: It's typically only an issue for older couples. If neither of you is bringing significant funds into the marriage, it's not necessary.

Any tips for budgeting a honeymoon?
DD: There's more wiggle room when planning a trip, so try to get every deal you can, and make sure to use your points or miles to reduce the cash going out the door.
KP: If you're really stretching your means for the big day, consider postponing your vacation or going somewhere less expensive.

Once you're married, what are some of the financial benefits?
DD: You'll be splitting the rent or mortgage payments and all other bills. Plus, taxes can offer savings. Talk to your accountant about your options for filing as a married couple. In most cases you get a break when filing jointly.
KP: Employee benefits come into play, too. One spouse might have a better package, so you can save money there.

Should couples insure their rings?
KP: Definitely. You may be able to get a rider in your renter's or homeowner's insurance that's pretty reasonable, or you can buy a stand-alone policy.

And what about life insurance?
KP: It's very important. Most people set it up through work. Make sure your beneficiary is who you want it to be, since you probably designated someone other than your spouse prior to getting married.

There's so much debate about opening a joint account. Do you recommend them?
DD: Yes. But keep your individual accounts for discretionary spending and also to maintain independent credit scores. Then open a joint one to cover all of your shared expenses. Be sure to set a price cap, and consult each other on purchases over a certain amount.
KP: The key to making it work is to agree on how much you'll each contribute. Will the person with the bigger salary add more every month, for example? Also discuss exactly what the account will be used for, like rent, groceries, and household bills.

Is there a rule of thumb about how much couples should save?
DD: Aim to keep an emergency reserve that covers six to nine months of living expenses. Then put at least 10 percent of your income in an Individual Retirement Account (IRA) or 401(k) for retirement.
KP: If you can't afford that, do what you can -- now! Retirement may seem a long way off, but few companies have pensions anymore. It's your responsibility to prepare for your future.