Antoinette Haile thought her boyfriend, Eric Patrick, was just being sentimental on New Year's Eve when he pulled out a photo album full of snapshots of the good times they'd shared during the past four years. But after dessert, the waiter at the elegant Dragonfly restaurant in Dallas came over with a gift-wrapped box for her as Patrick got down on one knee to propose. It's a moment Haile will never forget. Such is the stuff of great love stories. But all the romance in the world can be threatened by financial issues, which are a leading cause of divorce. When couples come together, they must undergo the unromantic process of figuring out how to divvy up bills, plan for retirement, identify priorities, and determine whether to combine assets, among other financial details. Going from "my money†to "our money†is no small matter. Haile and Patrick are determined to get on the same page from the outset. Patrick, 26, is a pharmacist at Baylor University and makes $100,000 a year. Haile, 23, who has a biology degree from Western Kentucky University, is a former coordinator for a national dental clinic and currently has a contract position making $13 an hour. She is looking for a full-time job in the healthcare industry that she estimates will provide a salary of around $65,000. Patrick has about $6,600 socked away in a 401(k), and he owes around $12,000 on a school-related debt and a little more than $37,000 on his 2012 Dodge Challenger. The two have combined savings of more than $14,000, with about $6,500 in credit card debt, and more than $250,000 in student loans. They used credit cards in college to pay for living expenses such as car payments and rent since loans and part-time work did not cover all their expenses. However, they recently paid off one credit card account and contribute $650 to payments of the other cards, paying $400, $150, and $100, even though their minimum required payments are only $150, $55, and $30 per month for each account. Unlike many couples who plan extravagant nuptials, Haile and Patrick have a firm budget limit of $15,000 for their special day, about half of which will be handled by their parents. Haile's father is springing for the honeymoon to a place yet to be decided. (Continued on next page) "I am building a website, so that instead of people giving us wedding gifts they can donate money that we will use to help buy a house,†Haile says. That grounding bodes well for their future. The couple wants to raise three kids, as well as save $40,000 by 2013 and eliminate their credit card debt so they can raise their credit scores from 698 and 678 to put themselves in a better borrowing position for purchasing over the next two years. Although Haile says she would like to retire by 45 and Patrick says 55 or 60 at the latest, they envision debt-free golden years, without worries of mortgage payments or student loan debt, and having $500,000 to $1 million in the bank. The couple currently holds separate accounts and will open a joint account for their wedding, which they will use afterwards for paying household expenses. As for how they will manage bills down the road: "We plan to put our paychecks into one account, in which we will pay all our bills first,†says Patrick. "Then we will put some money aside for savings and vacations, and whatever remains, we will split [between] us for our individual leisure.†When they get tax returns they each stash about a third, pay some bills, and spend a little. What's their game plan? Right now Patrick is saving $800 a pay period to build that $40,000, and the couple already has $14,300 saved; he estimates they will reach their goal or have at least $35,000 by Jan.1, 2013. He will receive two bonuses of roughly $3,000 to $4,000 each year, which he will save, and he will work overtime shifts. If Haile gets a full-time job, she will be able to contribute as well. They may use some of that $40,000 for a down payment. "We can get a lot for our money in Dallas. We don't want anything outlandish. We are looking for a mortgage in the $1,200 to $1,300 range,†Patrick says. They currently pay $950 on their one-bedroom apartment. They will put half their contest winnings into savings and the rest toward credit card bills. (Continued on next page) As for longer term goals, Patrick is saving about 5% of his salary in his 401(k). They have a plan, too, for those burdensome student loans–keep paying them faithfully for 10 years, and then take advantage of the College Cost Reduction and Access Act of 2007, which allows those who work for nonprofits, like his present employer, to write off the remaining balance. Haile plans to seek employment with a nonprofit as well. If that's not viable, she will use a 25-year loan forgiveness plan. The Advice Black Enterprise and Jocelyn D. Wright, a certified financial planner and founder and managing partner of Ascension Wealth Management in Elkins Park, Pennsylvania, took an in-depth look at the couple's finances. - Get real about retirement. "Eric and Antoinette seem to have their priorities in order, especially in terms of their wedding and their commitment to saving,†says Wright. However, they need a dose of reality. "What needs to be more clearly defined are their long-term goals. Their retirement goals of $500,000 to $1 million are unrealistic, given how early they are in their careers and Antoinette wants to retire at 45. Well, that would take an inheritance or some sort of windfall,†says Wright. Then, too, the two both have a family history of longevity, with relatives living into their 90s. "So if Antoinette retired at 45, she could have another 45 years in retirement, without the 20 more years of saving if she stepped out at 65,†Wright says. If Patrick and Haile want to retire at ages 48 and 45, for example, they would need to save up $2.6 million, which would require them to put aside $4,310 a month–completely unrealistic, Wright says. On the other hand, they could save $830 monthly and retire at ages 70 and 67 with $3.4 million. These figures are based on the couple living on 60% of a $100,000 household income and adjusted for inflation; the numbers do not factor in income from Social Security. (Continued on next page) "They should plan to live off Eric's salary and set aside a large portion of the $65,000 Antoinette believes she can get for retirement savings,†says Wright. Furthermore, Patrick is contributing about $5,000 of his yearly income to his 401(k), and does receive the company match, but Wright wants to see him gradually increase the percentage he saves as his salary increases, eventually reaching the maximum contribution, which is $17,000 for 2012. Patrick should continue to live off his old salary, says Wright. Even though Haile has a contract position, she can set up a Roth IRA and put away as little as $25 to $50 a month that she can build on later. "Just because she's not working full time, there's no reason to get behind the game,†says Wright. Patrick's 401(k) currently has 72% allocated in stocks, but Wright says that someone his age could be more aggressive with his allocation, having 80% or 90% in equities and taking down the equity exposure as he nears retirement. "He has enough time to withstand and recover from any downsides, but he can't keep that there forever,†Wright says. - Couple finances. Merging finances is more art than science. "Once they create a joint account, there's no cut and dry rule as to who should pay what. It's what they agree on. It's probably a good idea that they also keep separate accounts so they don't have to ask permission when they want to spend fun money,†says Wright, who says she lets couples choose a plan that will work best for them. Whatever they decide, they need to be sure to always discuss big-ticket items, she says. - Shore up savings. Wright says she would like to see them save the $40,000 they are aiming at. Not only would it cover their share of wedding costs, but with household expenses of $4,000 a month, they would also have six months of expenses ($24,000) for emergencies, and a chunk of money to put toward a down payment. (Continued on next page) - Continue tackling debt. As for their debt, more than 80% of it is student loans. Wright likes their strategy for getting rid of them in 10 years with loan forgiveness. "Given his balance of $172,000 right now, if he paid $900 to $1,000 a month for 10 years and the rest was forgiven, he could save more than $50,000, plus interest,†says Wright. Otherwise, their credit card debt is such that it can be paid off easily, and she thinks putting contest winnings toward the cards makes sense. Although their credit scores are in the high 600s, the 700s would be better still, says Wright. "The scores are where they are mostly because they lack a credit history. While they should pay off their credit cards, they shouldn't cancel them, so they have a track record of holding them for a longer period of time,†says Wright. The length of your credit history accounts for 15% of your FICO score. Having that available credit will also help increase their scores, Wright adds. Further, if interest rates remain low in 2013, Patrick should consider refinancing his car loan, which is currently 6.5%. - Create wedding contingency plans. Wright says the $5,000 to $7,000 that the couple will spend on their wedding is extremely reasonable. However, she cautions that weddings can take on a life of their own; not only can the guest list grow and grow, but stuff happens. "They need a contingency plan. What if the family can't contribute in the way they plan to now? What if one of the parents loses a job? Is the money already set aside? They also need to have a cushion on costs; they may go over budget,†says Wright. (Continued on next page) - Prepare for children. Just like retirement requires planning, so does starting a family. For example, what will child care costs do to the family budget? How will the couple balance saving for retirement with paying for college? be recommends the couple visit the USDA's cost of raising a child calculator to estimate how much it will cost annually to raise a child from birth until age 18. Patrick says he plans to buy cash value life insurance to use the cash built up for the children's college education. Wright says a 529 plan or other investing vehicle is a better option. They can set up an account before the children are born and transfer it from their names to the children's once they arrive. While Patrick currently has life insurance coverage through work, Wright recommends that they each get a supplemental policy, beyond what's offered by an employer. Patrick does not have disability insurance, so Wright suggests that he enroll in the group coverage available through Baylor, which will be the most cost-effective option for him right now. He will likely have to wait for the benefits open enrollment period, or for a change in status (such as marriage) to apply, whichever comes first. "Because he is the sole breadwinner, it is very important that he have proper coverage in case he is unable to work for an extended period of time due to illness or injury,†Wright says. If he is unable to get coverage through his employer, Wright advises that he get an individual policy to provide disability protection. What's key for the couple's long-term financial success? Maintaining their disciplined lifestyle. Says Wright, "They don't have grandiose expectations. They are on the right track.â€