Wedding Planner

As with the doctoral candidate, it’s not so much about trying to change or manipulate what the couple wants to do, it’s advising them on when to do it: Don’t skip the Ph.D., just wait a bit. Don’t give up on your dream job, even if it doesn’t provide health benefits or great pay; just hold out until it makes more financial sense. “I tell them, ‘Don’t give up on that dream. Just because you’re working for a big corporation now, if you’re dream is to be a photographer, go get all the credentials, go get all the experience–just do it as a part-time hobby,’” she says. “‘Then, down the road, when you want to go full-time, you’ll already have the experience and credentials, and we can figure out what to do about your health insurance.’” Baldwin herself followed that advice, earning her CFP in 1988 while working as a marketing analyst at a large corporation, Harris Semiconductor. From 1991 to 1994, she served as business administrator and part owner of a medical clinic, and it wasn’t until 1995 that she opened her own planning practice, a firm funded in large part by the proceeds from the sale of the clinic.

For one of the client couple’s most important life decisions, however, it’s not about timing, it’s about prevention. “One of my favorite lines is, ‘You want to know how to retire early? Don’t get divorced! Do you want to see a financial plan ruined? Watch it get divided in half,’” says Baldwin, who knows what she’s talking about, having gone through a divorce herself in 1996. “Think about it: They work all their lives, they’ve got 401(k)s, profit-sharing. And then all of a sudden, they cut it in two, their living expenses double–it’s ugly.” Top that off with the attorneys’ fees and two mid-life-crisis cars in candy-apple red, and now that spreadsheet is really ugly. Brides in particular would do well to consider the consequences, since the average woman experiences a 27% decrease in her standard of living following a divorce, while the average man’s standard of living increases 10%, according to a study archived at Radcliffe College’s Murray Research Center. Says Baldwin: “That’s why I tell them: Stay married!”

Enter the Marriage Planner

Most brides and grooms, particularly those referred by their parents, are not falling over themselves to talk about budgeting and credit card debt. “When you’re in love, you don’t want to go looking for issues,” says Baldwin. “They’re like, ‘Don’t go bringing up that stuff! Let’s talk about the cake and flowers!’” Couples entering their second marriages, however, are often more likely to come to her on their own: “Amazing how that experience makes a difference!” But in either case, Baldwin doesn’t cut anybody any slack, starting right off with compiling net-worth statements as she would with any other client.

For each partner, she makes a list of savings accounts, money market assets, investments, credit card debt, car loans, student loans, and what each partner earns in income. She notes which accounts are in which partners’ names, and double-checks that each person has named the retirement plan and life insurance beneficiaries they wish. If anything needs changing, she explains how to do it. She’s very up-front about the implications of these decisions; with second-marriage couples, “I’ll look right at them and say, ‘Okay, if you’re choosing the children [as your only beneficiaries], you’re making a big statement there,’” she says. “‘You love this person enough to marry them, but you’re not going to take care of them after you die?’” Wary second-time-around spouses may initially balk, but usually they come around. “It helps if you point out that it’s not that you’ve given [the spouse] your IRA money; you have to be dead for them to get it!” she laughs.

With young couples, Baldwin then moves on to a lesson in decision-making, to find out how each will respond to a future financial choice. “I’ll say, ‘Okay, let’s fast-forward a few years, and say that you need a new car. What are you going to do?’” The wife, for instance, may suggest financing the car, while the husband may respond that he’s always pinched pennies and then paid cash. “It’s clear what conflict is going to crop up here, so you just approach them with, ‘What’s the difference here?’” and begin walking them through the math, she says. “‘If you’re saving and getting 2% on your savings account, and she finances it and pays 7% interest, she’ll end up paying thousands more. Which do you think is better in the long run? And think how many cars you’re going to buy over the years.’” The same type of example can also be used to start a discussion about credit card debt.

The next item of interest is typically the question of an investment versus an expenditure, a distinction that, to Baldwin’s frustration, at least one of her newlywed couples has yet to master. “I have one couple who seems to be having a contest [over who can spend more],” she says. “He’s buying Harley Davidsons, he’s got a racecar, plus the trailer to pull it on–you name it.” In turn, the wife’s philosophy is, “Heck, if he can spend all that money, what difference does it make if I go out and buy some Ralph Lauren clothes?” She’s got a point, says Baldwin, “and yet, from my perspective, what I see is: high wage earners, no savings, no equity. Just stuff. If they were buying rental properties, that would be different. But racecars?” Baldwin is continuing to try to counsel the couple, but admits that some personality traits are hard to overcome. “I don’t always do so well with the big spenders,” she admits. “But when they’re both cheap–that’s perfect. That’s wonderful!”

One of her favorite financial planning tasks, she notes, is when a retired couple, both long-time savers, have enough funds that she can “refuse” to invest part of their portfolio and threaten to make them take a vacation. “You get to tease them: ‘You’re just going to have to figure out what you’re going to do with this money, because I’m not going to invest it. So, where’re you going? Hmmm?’” she laughs. “It’s a riot, and they always come back saying, ‘Thank you! We didn’t know how much fun that would be!’” Her goal is that all her newlywed clients may someday be in the same situation.

Happy Together?

Baldwin doesn’t have a simple answer for young couples wondering whether to merge their accounts or keep them separate, but the answer usually has a lot to do with each partner’s spending personality. For two savers, there’s no need for separate accounts; besides, she says, who needs to balance two checkbooks? For partners coming into the marriage with different spending patterns and amounts of debt, separate finances can make sense, either two separate accounts (his and hers) or three (his, hers, and theirs).

Baldwin has one client couple in which the bride came to the marriage laden with credit card debt, and the groom brought $1 million in an equity portfolio. The young man did generously pay off his new wife’s debt, but they established three accounts for future use. “She needed a budget, and I felt it would be better for her to maintain her own account,” says Baldwin. “They chose an amount that was appropriate for the two of them to live on [to keep in a joint account], and then she got her own checking account and her own charge cards, and she’s responsible for them.” (The husband got his own personal account, too.) An older, engaged, client couple have chosen to make an even stronger statement about spending and personal accountability. He will not be paying off her significant charge card debt; instead, next year, when she turns 591&Mac218;2, she will dip into her 401(k) to pay off the debt and start the marriage with a clean slate. “He’s worked too hard to get where he is to write the checks for her,” says Baldwin, noting that such decisions must be a balance between reducing high-interest debt (and protecting retirement savings) on the one hand, and keeping partners accountable for their spending on the other.

Advising engaged couples and newlyweds may not sound ideal to all planners–they’re not often rich, they’re not connected, they can’t pony up hefty ongoing fees. But for Mary Baldwin, faced with an opportunity to make a difference in the lives of young couples making their start in the world, it seems to be a match made in heaven.