Married, with money to manage

DETROIT — The wedding-day frenzy has ended, and the honeymoon happened weeks ago. Now one of the toughest challenges for young couples begins: managing finances.

Here are tips from financial consultants for living financially ever after:

• Communicate expectations and habits. Spouses should be open about credit-card and student-loan debts. Begin to set financial priorities by answering either/or questions such as: Which is more important, owning a home as soon as possible or taking vacations each year?

You're entitled to one free credit check a year from the three nationwide reporting agencies. Couples should use that information to gauge their financial health and measure progress.

• Know the difference between good debt and bad debt and take action. Good debt, for instance, is building equity through home ownership with a 5 or 6 percent interest rate on your home mortgage. Bad debt comes from abusing credit cards, which can have interest rates at 18 to 25 percent.

Pay off higher-interest accounts first before chipping away at lower-interest student loans.

• Don't fail at planning or budgeting. Couples should consider the costs of every anticipated life event and make sure they can afford them. Budget not only for the big items such as a house or car, but also for holiday and birthday presents, children's education and emergencies. Then, track expenses and compare them to the budget.

Before making a major purchase, such as a car or house, couples should save the monthly payment for six months.

To prepare for an emergency such as a major home repair or loss of work, have a money market account with three months' worth of living expenses.

Many couples think they can afford a home if the mortgage payment matches their rent. But newlyweds should also consider the taxes, insurance, repairs and maintenance fees. Expect to spend 2 percent of a home's value on repairs each year.

• Plan for children. One of the first decisions is whether one parent will stay home and there is a need to start planning for the loss of income. The birth of the baby is a good time to start thinking about saving for education, but until then, couples should maximize retirement savings.

• Take the surprise out of investing. Before taking a chance with stocks, newlyweds should discuss their comfort level. If a couple will need the money within five years, they should invest in money markets or certificates of deposit instead.