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CNN Live Saturday

"Dollar Signs": Helping Newlyweds Cope With Finances

Aired August 30, 2003 - 16:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


FREDERICKA WHITFIELD, CNN ANCHOR: Well welcome to "Dollar Signs" today. We want to help newly weds make their honeymoons last a bit longer. While shopping for the right dress or the grooms tux -- that's very important, one of the keys to a happy marriage, really, may be right in your pocket book. And it's something, perhaps, that you should talk about before you say I do.
Our financial correspondent Ali Velshi explains.

(BEGIN VIDEOTAPE)

KEVIN KING, NEWLY WED: I spend a lot more on expenses.

SHANNON KING, NEWLY WED: Yes.

K. KING: But that's -- we set if up that way, because she spends...

S. KING: It all on savings.

K. KING: A lot more on savings.

ALI VELSHI, CNN FINANCIAL CORRESPONDENT: Kevin and Shannon King have been married 10 months. Like most couples in America, money plays a huge role in their daily lives and they talk about it a lot.

JONATHAN POND, PRES. FINANCIAL PLANNING: Before the marriage you need to have full and complete disclosure of one another's financial situation. Marriage and money often clash and why start off the relationship by hiding things?

K. KING: I said we talked about it, briefly in a kind of general, before -- right around when we got engaged, but we actually had the first sit down, probably, a month or 2 after we were married?

S. KING: Well this is where she's saying where we are at now. And this is, I think, where we're supposed to be going.

VELSHI: But how do you start that conversation? One way is for both partners to create personal balance sheets. First, list your assets. Things like cars, investments and cash. Then, list your liabilities. Loans and debts that you owe. Subtract your liabilities from your assets and you've got your net worth. If your net worth is negative, you may have some thinking to do about your spending and saving habits.

ALAN KOPIT, LEGAL EDITOR LAWYERS.COM: It's like every other thing in a marriage. You have to sit down. If one person is a saver and one person is a spender, you have to sit down, develop a budget and decide how are we going to go about our financial life together.

K. KING: Clearly she is much more of a saver than I am.

S. KING: That' also my job. My job is to save all the money, yes.

VELSHI: But whoever manages the family finances, experts advise both parties to be involved from the beginning. Whether couples maintain a joint account or keep their money separate.

K. KING: I wouldn't say that one of us takes the lead in managing, but that we each have our own responsibilities. For example, my big ticket item is I pay the rent and Shannon's big ticket item is she is like a leading contributor to savings.

VELSHI: They may be responsible for different things but are their financial priorities and goals in line?

K. KING: Fundamentally I think we have similar views.

S. KING: It's not like, you know, you're looking to buy a Mazaratti and I want to buy a house. You know, I mean, we have very similar what we're striving for in those kind of important...

(END VIDEOTAPE)

VELSHI: Well, one of the things, Fredricka, that's important is you need to look at taxes, a prenuptial agreement, which we can talk a little bit more about later may come into play, but what a lot of financial planners told us that, while you've got to think about the things that lead up to your discussions about finance, it's never too early for a new couple to be thinking about future financial planning, things like retirement planning, buying a house and, of course, as we've discussed before children and the savings that you're going to need for their own college education - Fredricka.

WHITFIELD: All right, thanks Ali and I like that balance sheet you've got making a list of your cash, your investment and things like that. That's something worth sharing but there are some other points we want to go over too over the next half hour.

And, for that, we've asked Deborah McNaughton, author of the new video series "Your Financial Future" to join us as well and there she is. She's also written several books on the subject, including "The get out of Debt kit." She's joining us from Los Angeles.

All right, good to see both of you, let's get down and dirty with this. Obviously, before you even say I do perhaps you should talk about money. It's someone not everyone really does so why don't you begin, you know, with that Deborah to give us an idea of how do you even broach that topic when folks are so focused on trying to get the right wedding in place?

DEBORAH MCNAUGHTON, WWW.FINANCIALVICTORY.COM: That's a good topic they need to be talking about is what are their goals? Another thing they need to know, what is on their credit report before they come into the marriage because so often there may be either the guy or the gal may have had some past bad experiences and that can really impair what their future plans are for even purchasing a home.

WHITFIELD: And so, it means being very honest right up front about what you have and what you don't have because if one party comes to the table with a lot of debts then that means that the second party just might be saddled with the same problem, right?

MCNAUGHTON: Exactly and it might not just be the debts. They may have items on their credit report that is negative and needs to be taken care of and cleaned up before they get married or jointly, you know, discuss what needs to be done to rectify it.

WHITFIELD: All right, so now you've said I do and somehow you got to bring these to the table once again to really kind of come up with this balance sheet perhaps that Ali was suggested or, Deborah, you guys have to come up with a budget. How do you do that when there's so much new stuff that this couple has to encounter?

MCNAUGHTON: You know, setting up a budget, the B word, is absolutely terrifying for most couples and what they need to do is be honest as to what their expenditures are. What I usually recommend is that people before they even set a budget is make a journal of every nickel, dime, and penny that they are spending for 30 days, total up all of the columns.

Let's say you go to the ATM and you get $20. Where is that $20 going or you're going to get that cappuccino, write it down and you're going to find many times there's wasted money and how can you set a budget if you have money that you're losing.

WHITFIELD: Wow. OK, go ahead Ali. I think you want to chime in on that.

VELSHI: Yes, it's an interesting point because certainly one of the things we've realized over the last few years of talking to people about financial planning it's the little stuff that actually gets you. It's the stuff that you're not planning.

Everybody knows what their rent is and what their electricity payment is and what their cable payment is. It's where that discretionary income goes which is really the tricky part. And, one of the best tools for people, whether you're newlyweds or whoever you are, these financial websites all have tools for budgeting and it asks you every possible question.

You know list your credit cards, list all your expenses, and you'd be surprised. Most people, I think, come up with 30 to 40 percent of what their real expenses are. The tools exist for people to make that budget. It is daunting but it can be done.

WHITFIELD: Wow and they find out really in the long run once they calculate maybe through the help of this journal that that $3 cappuccino or Latte every day really does add up and that could, you know, really be a great savings.

Let's talk about paying off debts since that is something that, you know, some couples have to deal with even before they said I do. So, Deborah, how do you go about that? Does that mean that you try to make a, you know, pact that you'll live on one salary while the other one pays off the debt? I mean what can young couples really afford?

MCNAUGHTON: Well, first you need a reality check. Most people, if I was to say from memory, go ahead and list all of the debts that you have, credit cards, the balances, the payments you're making and interest rate. They'll write it down.

And then I say actually go back to your statements and write it down from the statements and they're in shock because usually they owe far more than they thought they owed and it's - I mean it's startling and that's when they need to get a game plan because you cannot live in a world that doesn't even exist.

VELSHI: Now here's one thing that we learned, Fredricka, speaking to the very - we spoke to a number of couples, not just Kevin and Shannon. Most couples going into marriage had different levels of debt, obviously, the different - the two parties coming in with different levels of debt.

They tended to be responsible for taking care of their own debt within the marriage not something that was pooled. In many cases that debt is school or a college debt and there are ways to pay that off over time on lower interest but we did find that that was something that new couples were not prepared to do, pool their debt and take care of it together.

WHITFIELD: It makes it real difficult too for a lot of young couples who want to save but now they're saddled with the debt. They got to address that first. But before we get to the whole saving issues, which is something that I know, you know, really hits close to home for both of you in terms of a real priority, let's talk about some of the e-mails that we've received.

One of them is broaching the topic of joint accounts. "Do you encourage a joint account or separate accounts for newlyweds to manage finances? Would your recommendation change if there were two wage earners" that from Jack Ryan out of Manhattan Beach - Ali?

VELSHI: One of the biggest things we encountered while putting this story together, it looks like there were a couple ways of doing things. There were some couples who pooled their money. They kept their own accounts for their own discretionary spending, you know, if they wanted to buy each other something or they wanted to do their own, buy their own CDs or whatever the case is.

Expenses tended to be pooled into a joint account so, your salaries would go into separate accounts and then every week both parties would put a fixed amount into a joint account and pay the expenses from there. We also found that over a few years that sort of went by the wayside and couples started to pool their money entirely.

WHITFIELD: All right, Deborah, your advice?

MCNAUGHTON: Well, you know, I have found that so often when you have a joint account and one is let's say using the ATM and debit card and not telling their spouse that they're withdrawing the money you've got a problem because you have no money at the end of the month and bills that you've already paid.

So, in circumstances like that I recommend that they each have a separate account, one with mad money in it, maybe a few hundred dollars that they're going to be able to use during that month that's not going to go into the budget because that is how you overdraw an account.

WHITFIELD: All right, Deborah and Ali, stick around. We're going to take a short break and when we come back we're going to be tackling the subject of how newlyweds can save. Now you're trying to figure out, you know, how to pay off the debt. Now you got to figure out how to save your money. Your calls and e-mails coming up next on DOLLAR SIGNS and, of course, you can still send your questions to dollarsigns@cnn.com or call us at 1-800-807-2620. We'll be right back.

(COMMERCIAL BREAK)

WHITFIELD: Well, welcome back. We're taking your e-mails and your calls on newlywed financial questions. Our Ali Velshi is with us from New York and financial expert Deborah McNaughton is along with us from Los Angeles, good to see both of you, glad you stuck around after the break.

Well, let's talk about protecting your income. You addressed the fact that, you know, some couple may want to have joint accounts. Some may want to have their individual accounts for mad money but what does this mean for protecting your own personal income if you've got a two-income family here or couple?

MCNAUGHTON: Well, I believe that you need to have at least three to six months of savings of your living expenses in case something was to happen. Perhaps you would become unemployed or a drop in income and it's three months if it's a married couple or, you know, two incomes and one is laid off you have at least one income and three months' reserve.

If you're a single wage earner in the family you need at least six months and that's overwhelming. People just think how am I ever going to save that but they can, you know, just little baby steps.

If I say I would like to see you save at least $2,000 a month - not a month, I'm sorry, a year, then most people will freeze up, I can't do it. But, if I say well how about saving $166.66 a month, well that totals $2,000 a year. It doesn't hurt. It doesn't feel bad to do that.

WHITFIELD: Wow, so it's real difficult for some couple in figuring out how to save but you know what it's also difficult trying to figure out how to spend money because sometimes, as we see from Jessica Ward from Pensacola, Florida, who has an e-mail question, she says:

"Sometimes a 'need' for one person is a 'want' for the other," talking about spending. "Any suggestions or advice to newlyweds on determining and prioritizing needs and wants without starting WW III - Ali?

VELSHI: You know when we were talking to Kevin and Shannon and some of the financial planners who we spoke to a trend emerged and that is sometimes savers are attracted to spenders.

Now, in our story, Kevin was the admitted spender and Shannon was the admitted saver. Now, what that means in terms of how you come to your priorities when you're married is that the person who is a natural spender has the discipline to put the money away, whether it's $166 a month or $1,000 a month.

The person who is the spender may not have that discipline. I'm certainly a spender. I don't have that same discipline. So, Kevin in the relationship takes care of paying some of the major expenses, like rent, because he doesn't need the discipline to do that. He knows he has to write a check every month to do it.

Shannon, who has the discipline to save actually is the one who's responsible for accumulating those savings. So, find out what your strengths are in your relationship and play to those strengths.

WHITFIELD: OK, I've got a phone call coming in from New Mexico, this from Lorraine. Lorraine, what's your question or comment?

LORRAINE: Yes, my question or comment is I just heard that he said sometimes savers are attracted to spenders. Some are attracted savers to spenders. Well, what if the saver is attracted to someone who has to ask his parents every five minutes for money and the spender has $100,000 in debt for college and you get into that marriage and the honeymoon is going to be add on another $16,000. You get into that marriage and a divorce arises. Does she take on one- half of that debt?

WHITFIELD: Deborah, I'll let you tackle that. Boy, that's a big one.

MCNAUGHTON: If the debt was in her name prior to the marriage and it's only in her name and let's say they are divorced shortly after, everything is in that individual's name.

A lot depends on the state that you live on if it's a community property state or not but, usually, if it's only in the primary name it does not necessarily mean it's going to go onto the new spouse. But, the big problem I see is why are these parents giving money? I mean nobody can grow if they keep going for a handout.

VELSHI: You know, one of the things we need to remember is some of the biggest debt that newlyweds come into the marriage with is college debt. That's not an entirely bad debt. In many cases that's a low interest debt and it can be paid off in a regulated systematic way. But, Fredricka, one thing that we found is that nine percent of people, newlyweds, think that a prenuptial agreement is important. Only one percent of people actually do them. Most people think it's a real downer to have to talk about that stuff and the understanding is if you don't come into the marriage with many assets, why would you bother?

Well, think about it in terms of debt as well. If you're marrying somebody who's coming in with a lot of debt and you want to insure that you're not going to be carrying that debt, it may be a bit of a downer. It's not so romantic but it might be worth a visit to a financial planner or a lawyer just to say what happens if things don't work out with us.

WHITFIELD: All right, a new topic of sorts from Page Bauer of Carversville, Pennsylvania. She says or writes: "I'm getting married next fall but I would prefer to keep my maiden name. I have heard that many tax breaks are available to married couples but only if they share the same surname. Is this true? Do I need to consider changing my name for fiscal reasons?"

VELSHI: No. It's not true at all. Your name is not going to affect your legal status. There are declarations yet to make when you fill in your income tax forms and when you submit your income taxes, no requirement anywhere in the United States that you need to change your name, that either party has to have the same name in order to benefit from marital tax status.

WHITFIELD: All right, and Deborah, I got another e-mail, this coming from T. Charlton in Cyprus, California asking: "My wife and I are saving for our first home. We're living on my wife's check and almost all of my paycheck goes directly into our company savings plan at five and three-quarters. We still have some debt, about $6,500. Should we pay off our debt first or keep saving?" That's a very common questions, Deborah that a lot of people seem to have. What do you do pay off the debt first or do you save?

MCNAUGHTON: Well, first I would say is to get pre-qualified to see what you can afford because properties, especially in California, are going up so rapidly and there's many programs that you can get in with mortgages with zero percent down or as low as three or five percent.

So, I would say get pre-qualified, see if that is a handicap. Yes, you definitely would want to pay off your debt as soon as you can but if you can get into a home and ride with this tide, you know, where the values are going up it may be a good time to jump in.

WHITFIELD: All right, Jean in Florida is on the telephone with us. Jean, what's your question or comment.

JEAN: Yes, hi, thank you. First, I'd like to say what a great program.

WHITFIELD: Oh, great.

JEAN: Absolutely.

WHITFIELD: All right.

JEAN: If you get enough people to watch it.

WHITFIELD: Well, hopefully this is helping you out and helping your finances.

JEAN: (Unintelligible). I'm a senior at Florida. I need to know if there's a free credit report. I don't have a computer and no car. Now, let me make this louder. I see you on TV and I hear you on the phone.

WHITFIELD: OK, well turn down your television set so that you can get your question out and someone can answer it for you.

JEAN: Still got my hearing, thank God.

WHITFIELD: OK, we'll come back to you Jean. We'll let you turn down the volume of your television.

All right, so another e-mail question for you guys. "I'm just coming out of a Chapter 10 bankruptcy less than a year ago and I'm trying to rebuild my credit; however, my wife of about a year has spotless credit. How is my poor credit history going to affect our application for a home," that from Eric in New Albany - Ali?

VELSHI: It is going to affect - both parties' credit is going to be a factor in determining a mortgage. It's better that one party has excellent credit than both parties have bad credit and the advantage of a credit score, as opposed to your credit history is that a credit score is a current snapshot of your credit worthiness.

So, if you have come out of a bankruptcy, that's part of your credit history and that is going to be detrimental when you go to apply for a loan but the credit score tells the lender where you are in terms of your credit worthiness and credit behavior right now.

Now, remember the one thing there are brokers and lenders who will lend to this couple but they will not qualify for the rates that we report here on CNN, those low prime mortgage rates that you can get. If you have been in bankruptcy or you've got poor credit you will pay a premium for a mortgage. It's good that his wife has good credit. It will help them secure the loan but they won't get the best rates.

WHITFIELD: So, Deborah, does this mean sometimes in a case like this that perhaps there will only be one applicant the one with the good credit?

MCNAUGHTON: If the one with the good credit can qualify for the mortgage then that would be the way to go and not put the spouse on. Another thing that you need to be aware of is that many of the programs out there will allow you to, you know, borrow provided you have reestablished new and good credit within two years after the bankruptcy. If you have any flaws from the time that you qualify for a new loan you will be turned down.

WHITFIELD: OK.

MCNAUGHTON: Even if it's the sub-primes, so you want to reestablish yourself.

WHITFIELD: All right more of your e-mails and your calls coming up right after this break.

(COMMERCIAL BREAK)

WHITFIELD: In DOLLAR SIGNS today we're talking about newlyweds and their finances and Ali Velshi and Deborah McNaughton are along with us from New York and Los Angeles.

And, we got a call in from Nelson in Georgia, Nelson what's your question or comment?

NELSON: Hi. I just want to say, Fredricka, I think you were great at NBC and you're great at CNN.

WHITFIELD: OK, well thanks Nelson.


Aired August 30, 2003 - 16:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDERICKA WHITFIELD, CNN ANCHOR: Well welcome to "Dollar Signs" today. We want to help newly weds make their honeymoons last a bit longer. While shopping for the right dress or the grooms tux -- that's very important, one of the keys to a happy marriage, really, may be right in your pocket book. And it's something, perhaps, that you should talk about before you say I do.
Our financial correspondent Ali Velshi explains.

(BEGIN VIDEOTAPE)

KEVIN KING, NEWLY WED: I spend a lot more on expenses.

SHANNON KING, NEWLY WED: Yes.

K. KING: But that's -- we set if up that way, because she spends...

S. KING: It all on savings.

K. KING: A lot more on savings.

ALI VELSHI, CNN FINANCIAL CORRESPONDENT: Kevin and Shannon King have been married 10 months. Like most couples in America, money plays a huge role in their daily lives and they talk about it a lot.

JONATHAN POND, PRES. FINANCIAL PLANNING: Before the marriage you need to have full and complete disclosure of one another's financial situation. Marriage and money often clash and why start off the relationship by hiding things?

K. KING: I said we talked about it, briefly in a kind of general, before -- right around when we got engaged, but we actually had the first sit down, probably, a month or 2 after we were married?

S. KING: Well this is where she's saying where we are at now. And this is, I think, where we're supposed to be going.

VELSHI: But how do you start that conversation? One way is for both partners to create personal balance sheets. First, list your assets. Things like cars, investments and cash. Then, list your liabilities. Loans and debts that you owe. Subtract your liabilities from your assets and you've got your net worth. If your net worth is negative, you may have some thinking to do about your spending and saving habits.

ALAN KOPIT, LEGAL EDITOR LAWYERS.COM: It's like every other thing in a marriage. You have to sit down. If one person is a saver and one person is a spender, you have to sit down, develop a budget and decide how are we going to go about our financial life together.

K. KING: Clearly she is much more of a saver than I am.

S. KING: That' also my job. My job is to save all the money, yes.

VELSHI: But whoever manages the family finances, experts advise both parties to be involved from the beginning. Whether couples maintain a joint account or keep their money separate.

K. KING: I wouldn't say that one of us takes the lead in managing, but that we each have our own responsibilities. For example, my big ticket item is I pay the rent and Shannon's big ticket item is she is like a leading contributor to savings.

VELSHI: They may be responsible for different things but are their financial priorities and goals in line?

K. KING: Fundamentally I think we have similar views.

S. KING: It's not like, you know, you're looking to buy a Mazaratti and I want to buy a house. You know, I mean, we have very similar what we're striving for in those kind of important...

(END VIDEOTAPE)

VELSHI: Well, one of the things, Fredricka, that's important is you need to look at taxes, a prenuptial agreement, which we can talk a little bit more about later may come into play, but what a lot of financial planners told us that, while you've got to think about the things that lead up to your discussions about finance, it's never too early for a new couple to be thinking about future financial planning, things like retirement planning, buying a house and, of course, as we've discussed before children and the savings that you're going to need for their own college education - Fredricka.

WHITFIELD: All right, thanks Ali and I like that balance sheet you've got making a list of your cash, your investment and things like that. That's something worth sharing but there are some other points we want to go over too over the next half hour.

And, for that, we've asked Deborah McNaughton, author of the new video series "Your Financial Future" to join us as well and there she is. She's also written several books on the subject, including "The get out of Debt kit." She's joining us from Los Angeles.

All right, good to see both of you, let's get down and dirty with this. Obviously, before you even say I do perhaps you should talk about money. It's someone not everyone really does so why don't you begin, you know, with that Deborah to give us an idea of how do you even broach that topic when folks are so focused on trying to get the right wedding in place?

DEBORAH MCNAUGHTON, WWW.FINANCIALVICTORY.COM: That's a good topic they need to be talking about is what are their goals? Another thing they need to know, what is on their credit report before they come into the marriage because so often there may be either the guy or the gal may have had some past bad experiences and that can really impair what their future plans are for even purchasing a home.

WHITFIELD: And so, it means being very honest right up front about what you have and what you don't have because if one party comes to the table with a lot of debts then that means that the second party just might be saddled with the same problem, right?

MCNAUGHTON: Exactly and it might not just be the debts. They may have items on their credit report that is negative and needs to be taken care of and cleaned up before they get married or jointly, you know, discuss what needs to be done to rectify it.

WHITFIELD: All right, so now you've said I do and somehow you got to bring these to the table once again to really kind of come up with this balance sheet perhaps that Ali was suggested or, Deborah, you guys have to come up with a budget. How do you do that when there's so much new stuff that this couple has to encounter?

MCNAUGHTON: You know, setting up a budget, the B word, is absolutely terrifying for most couples and what they need to do is be honest as to what their expenditures are. What I usually recommend is that people before they even set a budget is make a journal of every nickel, dime, and penny that they are spending for 30 days, total up all of the columns.

Let's say you go to the ATM and you get $20. Where is that $20 going or you're going to get that cappuccino, write it down and you're going to find many times there's wasted money and how can you set a budget if you have money that you're losing.

WHITFIELD: Wow. OK, go ahead Ali. I think you want to chime in on that.

VELSHI: Yes, it's an interesting point because certainly one of the things we've realized over the last few years of talking to people about financial planning it's the little stuff that actually gets you. It's the stuff that you're not planning.

Everybody knows what their rent is and what their electricity payment is and what their cable payment is. It's where that discretionary income goes which is really the tricky part. And, one of the best tools for people, whether you're newlyweds or whoever you are, these financial websites all have tools for budgeting and it asks you every possible question.

You know list your credit cards, list all your expenses, and you'd be surprised. Most people, I think, come up with 30 to 40 percent of what their real expenses are. The tools exist for people to make that budget. It is daunting but it can be done.

WHITFIELD: Wow and they find out really in the long run once they calculate maybe through the help of this journal that that $3 cappuccino or Latte every day really does add up and that could, you know, really be a great savings.

Let's talk about paying off debts since that is something that, you know, some couples have to deal with even before they said I do. So, Deborah, how do you go about that? Does that mean that you try to make a, you know, pact that you'll live on one salary while the other one pays off the debt? I mean what can young couples really afford?

MCNAUGHTON: Well, first you need a reality check. Most people, if I was to say from memory, go ahead and list all of the debts that you have, credit cards, the balances, the payments you're making and interest rate. They'll write it down.

And then I say actually go back to your statements and write it down from the statements and they're in shock because usually they owe far more than they thought they owed and it's - I mean it's startling and that's when they need to get a game plan because you cannot live in a world that doesn't even exist.

VELSHI: Now here's one thing that we learned, Fredricka, speaking to the very - we spoke to a number of couples, not just Kevin and Shannon. Most couples going into marriage had different levels of debt, obviously, the different - the two parties coming in with different levels of debt.

They tended to be responsible for taking care of their own debt within the marriage not something that was pooled. In many cases that debt is school or a college debt and there are ways to pay that off over time on lower interest but we did find that that was something that new couples were not prepared to do, pool their debt and take care of it together.

WHITFIELD: It makes it real difficult too for a lot of young couples who want to save but now they're saddled with the debt. They got to address that first. But before we get to the whole saving issues, which is something that I know, you know, really hits close to home for both of you in terms of a real priority, let's talk about some of the e-mails that we've received.

One of them is broaching the topic of joint accounts. "Do you encourage a joint account or separate accounts for newlyweds to manage finances? Would your recommendation change if there were two wage earners" that from Jack Ryan out of Manhattan Beach - Ali?

VELSHI: One of the biggest things we encountered while putting this story together, it looks like there were a couple ways of doing things. There were some couples who pooled their money. They kept their own accounts for their own discretionary spending, you know, if they wanted to buy each other something or they wanted to do their own, buy their own CDs or whatever the case is.

Expenses tended to be pooled into a joint account so, your salaries would go into separate accounts and then every week both parties would put a fixed amount into a joint account and pay the expenses from there. We also found that over a few years that sort of went by the wayside and couples started to pool their money entirely.

WHITFIELD: All right, Deborah, your advice?

MCNAUGHTON: Well, you know, I have found that so often when you have a joint account and one is let's say using the ATM and debit card and not telling their spouse that they're withdrawing the money you've got a problem because you have no money at the end of the month and bills that you've already paid.

So, in circumstances like that I recommend that they each have a separate account, one with mad money in it, maybe a few hundred dollars that they're going to be able to use during that month that's not going to go into the budget because that is how you overdraw an account.

WHITFIELD: All right, Deborah and Ali, stick around. We're going to take a short break and when we come back we're going to be tackling the subject of how newlyweds can save. Now you're trying to figure out, you know, how to pay off the debt. Now you got to figure out how to save your money. Your calls and e-mails coming up next on DOLLAR SIGNS and, of course, you can still send your questions to dollarsigns@cnn.com or call us at 1-800-807-2620. We'll be right back.

(COMMERCIAL BREAK)

WHITFIELD: Well, welcome back. We're taking your e-mails and your calls on newlywed financial questions. Our Ali Velshi is with us from New York and financial expert Deborah McNaughton is along with us from Los Angeles, good to see both of you, glad you stuck around after the break.

Well, let's talk about protecting your income. You addressed the fact that, you know, some couple may want to have joint accounts. Some may want to have their individual accounts for mad money but what does this mean for protecting your own personal income if you've got a two-income family here or couple?

MCNAUGHTON: Well, I believe that you need to have at least three to six months of savings of your living expenses in case something was to happen. Perhaps you would become unemployed or a drop in income and it's three months if it's a married couple or, you know, two incomes and one is laid off you have at least one income and three months' reserve.

If you're a single wage earner in the family you need at least six months and that's overwhelming. People just think how am I ever going to save that but they can, you know, just little baby steps.

If I say I would like to see you save at least $2,000 a month - not a month, I'm sorry, a year, then most people will freeze up, I can't do it. But, if I say well how about saving $166.66 a month, well that totals $2,000 a year. It doesn't hurt. It doesn't feel bad to do that.

WHITFIELD: Wow, so it's real difficult for some couple in figuring out how to save but you know what it's also difficult trying to figure out how to spend money because sometimes, as we see from Jessica Ward from Pensacola, Florida, who has an e-mail question, she says:

"Sometimes a 'need' for one person is a 'want' for the other," talking about spending. "Any suggestions or advice to newlyweds on determining and prioritizing needs and wants without starting WW III - Ali?

VELSHI: You know when we were talking to Kevin and Shannon and some of the financial planners who we spoke to a trend emerged and that is sometimes savers are attracted to spenders.

Now, in our story, Kevin was the admitted spender and Shannon was the admitted saver. Now, what that means in terms of how you come to your priorities when you're married is that the person who is a natural spender has the discipline to put the money away, whether it's $166 a month or $1,000 a month.

The person who is the spender may not have that discipline. I'm certainly a spender. I don't have that same discipline. So, Kevin in the relationship takes care of paying some of the major expenses, like rent, because he doesn't need the discipline to do that. He knows he has to write a check every month to do it.

Shannon, who has the discipline to save actually is the one who's responsible for accumulating those savings. So, find out what your strengths are in your relationship and play to those strengths.

WHITFIELD: OK, I've got a phone call coming in from New Mexico, this from Lorraine. Lorraine, what's your question or comment?

LORRAINE: Yes, my question or comment is I just heard that he said sometimes savers are attracted to spenders. Some are attracted savers to spenders. Well, what if the saver is attracted to someone who has to ask his parents every five minutes for money and the spender has $100,000 in debt for college and you get into that marriage and the honeymoon is going to be add on another $16,000. You get into that marriage and a divorce arises. Does she take on one- half of that debt?

WHITFIELD: Deborah, I'll let you tackle that. Boy, that's a big one.

MCNAUGHTON: If the debt was in her name prior to the marriage and it's only in her name and let's say they are divorced shortly after, everything is in that individual's name.

A lot depends on the state that you live on if it's a community property state or not but, usually, if it's only in the primary name it does not necessarily mean it's going to go onto the new spouse. But, the big problem I see is why are these parents giving money? I mean nobody can grow if they keep going for a handout.

VELSHI: You know, one of the things we need to remember is some of the biggest debt that newlyweds come into the marriage with is college debt. That's not an entirely bad debt. In many cases that's a low interest debt and it can be paid off in a regulated systematic way. But, Fredricka, one thing that we found is that nine percent of people, newlyweds, think that a prenuptial agreement is important. Only one percent of people actually do them. Most people think it's a real downer to have to talk about that stuff and the understanding is if you don't come into the marriage with many assets, why would you bother?

Well, think about it in terms of debt as well. If you're marrying somebody who's coming in with a lot of debt and you want to insure that you're not going to be carrying that debt, it may be a bit of a downer. It's not so romantic but it might be worth a visit to a financial planner or a lawyer just to say what happens if things don't work out with us.

WHITFIELD: All right, a new topic of sorts from Page Bauer of Carversville, Pennsylvania. She says or writes: "I'm getting married next fall but I would prefer to keep my maiden name. I have heard that many tax breaks are available to married couples but only if they share the same surname. Is this true? Do I need to consider changing my name for fiscal reasons?"

VELSHI: No. It's not true at all. Your name is not going to affect your legal status. There are declarations yet to make when you fill in your income tax forms and when you submit your income taxes, no requirement anywhere in the United States that you need to change your name, that either party has to have the same name in order to benefit from marital tax status.

WHITFIELD: All right, and Deborah, I got another e-mail, this coming from T. Charlton in Cyprus, California asking: "My wife and I are saving for our first home. We're living on my wife's check and almost all of my paycheck goes directly into our company savings plan at five and three-quarters. We still have some debt, about $6,500. Should we pay off our debt first or keep saving?" That's a very common questions, Deborah that a lot of people seem to have. What do you do pay off the debt first or do you save?

MCNAUGHTON: Well, first I would say is to get pre-qualified to see what you can afford because properties, especially in California, are going up so rapidly and there's many programs that you can get in with mortgages with zero percent down or as low as three or five percent.

So, I would say get pre-qualified, see if that is a handicap. Yes, you definitely would want to pay off your debt as soon as you can but if you can get into a home and ride with this tide, you know, where the values are going up it may be a good time to jump in.

WHITFIELD: All right, Jean in Florida is on the telephone with us. Jean, what's your question or comment.

JEAN: Yes, hi, thank you. First, I'd like to say what a great program.

WHITFIELD: Oh, great.

JEAN: Absolutely.

WHITFIELD: All right.

JEAN: If you get enough people to watch it.

WHITFIELD: Well, hopefully this is helping you out and helping your finances.

JEAN: (Unintelligible). I'm a senior at Florida. I need to know if there's a free credit report. I don't have a computer and no car. Now, let me make this louder. I see you on TV and I hear you on the phone.

WHITFIELD: OK, well turn down your television set so that you can get your question out and someone can answer it for you.

JEAN: Still got my hearing, thank God.

WHITFIELD: OK, we'll come back to you Jean. We'll let you turn down the volume of your television.

All right, so another e-mail question for you guys. "I'm just coming out of a Chapter 10 bankruptcy less than a year ago and I'm trying to rebuild my credit; however, my wife of about a year has spotless credit. How is my poor credit history going to affect our application for a home," that from Eric in New Albany - Ali?

VELSHI: It is going to affect - both parties' credit is going to be a factor in determining a mortgage. It's better that one party has excellent credit than both parties have bad credit and the advantage of a credit score, as opposed to your credit history is that a credit score is a current snapshot of your credit worthiness.

So, if you have come out of a bankruptcy, that's part of your credit history and that is going to be detrimental when you go to apply for a loan but the credit score tells the lender where you are in terms of your credit worthiness and credit behavior right now.

Now, remember the one thing there are brokers and lenders who will lend to this couple but they will not qualify for the rates that we report here on CNN, those low prime mortgage rates that you can get. If you have been in bankruptcy or you've got poor credit you will pay a premium for a mortgage. It's good that his wife has good credit. It will help them secure the loan but they won't get the best rates.

WHITFIELD: So, Deborah, does this mean sometimes in a case like this that perhaps there will only be one applicant the one with the good credit?

MCNAUGHTON: If the one with the good credit can qualify for the mortgage then that would be the way to go and not put the spouse on. Another thing that you need to be aware of is that many of the programs out there will allow you to, you know, borrow provided you have reestablished new and good credit within two years after the bankruptcy. If you have any flaws from the time that you qualify for a new loan you will be turned down.

WHITFIELD: OK.

MCNAUGHTON: Even if it's the sub-primes, so you want to reestablish yourself.

WHITFIELD: All right more of your e-mails and your calls coming up right after this break.

(COMMERCIAL BREAK)

WHITFIELD: In DOLLAR SIGNS today we're talking about newlyweds and their finances and Ali Velshi and Deborah McNaughton are along with us from New York and Los Angeles.

And, we got a call in from Nelson in Georgia, Nelson what's your question or comment?

NELSON: Hi. I just want to say, Fredricka, I think you were great at NBC and you're great at CNN.

WHITFIELD: OK, well thanks Nelson.