Elisa saw a savvy negotiator in Patrick the night they met—he won the chance to try and kiss her over another guy at his fraternity's barbecue... by beating him at rock-paper-scissors. "Okay, I found this out much later," Elisa admits. "If I'd known at the time I wouldn't have kissed anyone!" Luckily, Patrick managed to win her admiration, too. "When he left, he didn't just ask for my number, he pulled out his cell phone and made sure he spelled my name right as he programmed it in," she remembers. "He then called as soon as he got home a couple of hours later. I was impressed by his determination. We started dating that week."
Turns out the couple had a mutual determination when it came to building a future together. Soon a wedding was in the works. Conversations about finances had always been a part of the mix. "We reached settlements on a lot of things when we moved in together," Patrick, 32, an accountant, says of early financial discussions. "The most frequent argument is when neither of us feels like cooking and we can't order in because it's not part of the food budget."
Though no formal prenuptial agreement was made, Elisa, 31, a facilities coordinator, made some wishes for the future known. "The only issue we discussed was a small college fund I'd started for my niece when she was born," says Elisa. "And then it wasn't really a case of 'if we get divorced,' but more along the lines of 'if something happens to me, this is what this account is for.'"
Through these talks, the couple realized they had different approaches to finances. Elisa learned about saving for the future early on. "My mother helped me open my first savings account at a small local bank because I wanted a trampoline," she recalls. "I became an avid saver, watching those little amounts total up in the passbook. I never got the trampoline, because by the time I had the money it was too hard to part with it."
Patrick had a similar experience via a savings account set up by his parents that allowed him access to deposit and withdraw funds. He credits that experience with teaching him self-control. And he gives Elisa props for helping him develop a deeper understanding of savings. "She showed me what was important and how to get there," says Patrick. "Now that I'm married, I realize it's about us and it's our money. I've learned not to be quick to spend money on unimportant things like electronics and DVDs."
Thanks to the help of family, the couple was able to financially contribute to the wedding and honeymoon without incurring debt. "We were able to pay cash for everything with a little careful planning," says Elisa. As they settled into married bliss and newlywed budgeting, they realized something about careful planning: You need to except the unexpected costs. "The only thing we've ever disagreed on is when unexpected things come up. Do we take away from the next month's budget to make up for it or just let it slide?'
Then there were student loans. Negotiations also took place about these. "I wanted to use our house down payment fund to wipe out our student loans and start fresh, but that made him uncomfortable, so we haven't done it... yet," says Elisa. "Sometimes it's hard to realize someone gets to have a say in a final decision." What was their final decision? "At first, I wanted to pay off the car since student loan interest is tax-deductible," says Patrick. "Ultimately, we sold the car and put the money toward student loans."
The couple also found a balance in their financial lives. "We came up with a budget plan," says Elisa. "It's a little Dave Ramsey, a little random money blogs and a little of just what works for us." Monthly, they pay bills together. Elisa's in charge of the day-to-day tracking of their major accounts (they've had joint accounts since their engagement), and Patrick tracks weekly expenses and cash purchases. "I manage the budget sheets; he does our QuickBooks," Elisa says. "I would say I spend more everyday time on it than he does, but he deals with more of the annoying little stuff."
The yin and yang of their financial differences also seem to be working for them. "If it weren't for him, I'd be on ramen noodles until we paid off those student loans," says Elisa. Patrick says this isn't an exaggeration. "She's definitely willing to live poorer than I am. I hate having debt, but I won't eat off the dollar menu to get rid of it."
Retirement funds rank high among the couple's financial goals. That being said, Elisa admits this precedence is on a bit of a hiatus. "Before we started really trying to pay off all our debt, I was putting 5 to 10% of my income in a Roth 401(k) plus fully funding my Roth IRA. Since we're both big believers in funding our own retirement, it's our first priority after the debt is paid off and our emergency fund is fully funded."
Down the road, they plan on working with a financial adviser. For now, Patrick uses his accounting skills when it comes to tax issues. His job also gives him access to professionals when advice is needed.
Working together on their finances, the couple has grown. "In the past, I was just saving for myself and my goals, and if I didn't hit my targets,no one else suffered," says Elisa. "Now I feel more responsible for the future of someone else." Patrick says he feels more pressure to be sensible. "I want to contribute to our goals as much as possible, especially with my income being so erratic. It's made me realize that the latest gadget isn't so important."
Through this growth, the couple says their lives have become enriched. "When I look at how much progress we've made in the last year, I definitely feel richer," says Elisa. "Yet we're still keeping our expenses as low as possible, so sometimes poorer." Patrick echoes his wife's sentiments" "Financially, we've come so far and have more in savings than we do in debt, which makes me breathe a lot easier."
Beyond paying off student loans, the couple has some specific goals in sight. "We're slowly adding to our emergency account and have the beginnings of a down payment for a house one day," says Elisa. Why an emergency account? A baby is on the way. As for predicting the child's future, odds are there's a little saver about to join the family.
The Experts Weigh In
What stands out for Kaiser about Elisa and Patrick is that they've encountered unexpected expenses for which they didn't account when it came to budgeting. "Unexpected is a very common word that leads to stressful situations," she says. "It's not a situation unique to newlyweds, either. Everyone surprised by unexpected expenses."
When that happens, Kaiser says to stop for a second and consider the impact of the expenses. "It's really important to know from the very beginning when and how you will pay the money back," she says. "If you're dealing with a $1,000 bill for a car repair, it's probably going on a credit card." Using this method of payment can come with its own surprises by way of interest charges, so knowing the potential "real cost" is important. Says Kaiser, "Couples need to figure out how they're going to work through unexpected times, because they're going to happen over and over again."
Snyder has her own recommendations for the couple. "To avoid cooking arguments and the associated expenses of eating out, plan meals for the week in advance and focus on at least one to two meals that will generate desirable leftovers."
As for the children in the duo's lives, Snyder suggests this for the savings Elisa has set aside for her niece: "Put this college fund in a 529 college savings plan account, Coverdell Education Savings Account, or other similar vehicle to ensure the account is used for this purpose and to reap associated tax benefits."
For the soon-to-be addition to the family, Snyder says, "Take a hard and honest look at your budget and start revising now to prepare for additional expenses associated with a growing family."