Here, four couples who took big risks - and reaped big rewards.
Find out what the two of you can learn.
Should we invest a portion of our newly combined income in the stock market? Do we buy a new home right away, or wait a year or so? Can we bank one of our salaries and live on the other? These are just some of the financial questions newlyweds are faced with soon after tying the knot.
While there are no definitive answers to any of these questions, financial experts will tell you that making important money moves - the ones that may well ensure your fiscal security for the long haul - often requires taking risks. No pain, no gain, right? These couples were willing to gamble, and the odds ended up in their favor.
Taking the Property Plunge
Mary Ellen and Robin Ynes
Foster City, California
Mary Ellen, 37, and Robin, 40, began married life in August 1993 in debt, with about eight store and bank credit cards between them. Their goals: to eliminate the debt and get down to one card. "We drew up a strict budget that allowed for only the essential expenses, traded a more expensive car for a cheaper one to lower our monthly payments, cooked meals at home rather than going out and watched a lot of videos instead of seeing big-ticket plays," says Mary Ellen. "We also put any money we got as promotions or bonuses towards the debt." It took 18 months to reach their debt-free goal.
During this time, the couple lived in a pricey one-bedroom apartment, and yearned for a larger living space. When Mary Ellen received a lump sum as severance pay from a former employer, they considered going for it and buying a house. Being so recently debt free, however, they were wary about blowing their whole nest egg on real estate. "At first I was put off by the high prices in California," says Mary Ellen. "But I did a lot of research and talked to friends in real estate, and concluded it would be smart to take the plunge."
Wisely, Robin and Mary Ellen did extensive research on the cost of homes in the area, and did much of the negotiating directly with the home seller. They also took advantages of incentives for first-time home buyers, such as putting down as little as 5% of the home's total cost.
That was four days ago and today, Mary Ellen and Robin are elated with their investment: Their three-bedroom townhouse was recently appraised for double the purchase price. "Looking back, it's the smartest money move we ever made. I never would have thought the house would double in price in this short period of time," says Mary Ellen. "It's a comfort to know if we wanted to move anywhere else, we now have that equity."
Creating the Link to Success
Shannon and Paul Entin
Lambertville, New Jersey
About five years ago, Shannon Entin, 31, was looking for information about stress management and fitness on the Web, but her search was in vain. Frustrated, Shannon - who, aside from having a high-paying finance job, had been teaching group exercise classes for 10 years - mulled over the concept of launching her own health and fitness website.
Of course, she couldn't have done it without the support of her husband of just one year, Paul, also 31, who is in advertising. He encouraged Shannon to quit her job so that she could launch the website FitnessLink.
"It was a really big change. Paul was making enough money, so we knew we could get by, but we still had to change our lifestyle a bit," says Shannon. Without and financial backers, Shannon did most of the work herself; Paul's business connections helped her to get initial advertisers on board.
Launching a successful website packed with relevant health and fitness information doesn't happen overnight. It took a few years to build the site and make a profit. As any new business owner, Shannon was on shaky financial ground. But it paid off: In late 1999 the site began to boom, so much so that Paul quit his job to work full time with his wife. Now, the couple work from home while caring for their son, Logan, and are looking for more capital to expand the site.
"To be able to work from home and spend time together and with our son, as well as to be able to make more money than we were earning at our previous jobs, is pretty positive," says Paul.
Banking on One Salary
Janice and Larry McLaury
San Diego, California
After carrying on a long distance relationship for several years, Janice and Larry McLaury got married in September 1996. Janice, 33, started out the marriage unemployed; after their wedding, she and Larry, 36, a defense contract specialist, moved from Northern California to Washington DC, where they lived on Larry's salary for four months while Janice was looking for work. She eventually found a public relations consulting job, but their early months of living on Larry's pay gave them an idea, and when Janice started working they decided to bank her entire salary.
"Once we were forced to live on his salary, we realized we could do it. So why not save mine?" she says. Their conservative measures paid off. A year and a half later, the McLaury's moved back to California with a whopping 35% down payment for a home.
Today, the couple continues this practice, investing a portion of their savings in stocks and long-term mutual funds. They admit to dipping into their savings for home remodeling and vacations, but "never to pay bills," Janice says.
Sounds great, right? But is may not be for everyone. "Living on one salary requires a lot of discipline," says Jennifer Ridley Hanson, director of financial planning for the San Francisco-based Financial Finesse, an organization that provides financial information for women. "But the couple who can do it over the long term will win"
Saving for Retirement
Gail Lieberman and Alan Lavine
Palm Beach, Florida
Having married at an older age than most couples, Gail 49, and Alan, 52, each were set in their ways when it came to spending and saving habits. After tying the knot in December 1991, Gail, "the spender," and Alan, "the saver," knew they had to meet in the middle to achieve fiscal and marital bliss.
"At first we didn't see all of our holdings as a unit," admits Gail. But the couple agreed to take a chance on each other's advice; Gail did a little more saving and Alan agreed to loosen the purse strings. The couple also made the brave move to consolidate their retirement accounts and open new mutual-fund accounts together. "You only need $500 to $1,000 to start many mutual funds. It's a good way for young couples to start out," says Alan.
The couple's smartest money decision, says Gail is the continued practice of dollar cost averaging - which means putting the same amount of money into a fund each month, so your investment evens out over time. Feeling secure about their retirement savings, the couple bought a home in 1997.
Since Gail and Alan made the decision to make the most of their money by merging their financial holdings, they have written a book, Love, Marriage & Money (Dearborn, 1998), which instructs other couples on how to do the same. Now, go for it!
$MART MONEY TIP$
If he is the spender and you're the saver - or vice-versa - you need to plot your financial strategies early on in the marriage. Financial planners Ginita Wall and Jennifer Ridley Hanson, of Financial Finesse in San Francisco, offer newlyweds these tips:
Be Flexible
Instead of trying to find the "perfect" system, try out different spending and saving plans during the early months and years of marriage.
Start Saving for Retirement Now
It may seem far off, but if you stash money in a mutual fund, it will accumulate while you're busy living.
Communicate
Even if one person writes out all the checks, talk about your finances together on a regular basis.
Don't bite off more than you can chew
If you're buying a home, don't stretch your finances so far that both of you have to be earning your current salary or above to make the payments. Your total salary should be three to four times your annual mortgage payment.
*All photos taken by various photographers at various locations, and are not necessarily the couples mentioned in the article.
*Reprinted from Spring/Summer 2003
