When a couple’s financial priorities don’t line up, money can become a big problem in a loving relationship. In fact, experts have found that money issues are one of the leading causes of divorce. But it doesn’t have to be that way. Here are a few ways that you and your loved one can work together to improve your relationship with money and with each other.
Keeping financial problems hidden can impede your plans and potentially hurt your relationship. If you want to navigate your finances as a couple successfully, you must confide in and trust in each other. Discuss the financial concerns you may have and any money differences you had in your previous relationships. Start out by putting all your information on the table, including debt, income, the types of accounts you have, any property owned, obligations and so on. Being honest and transparent will give you and your partner a better idea of what is important and how to develop a financial partnership.
Would you like to pay off existing debt? Buy a home? Have kids? Own your own business? Travel the world? Save for retirement? Sit down with your significant other and discuss your financial priorities. Find out how your individual goals might sync up and figure out what steps you need to take to accomplish them as a couple.
Tracking your spending as a couple is vital. You need to know where your money is going to create goals and build toward them financially. Start by creating a budget that sets amounts for expenditures and keeps track of what you spend each month. There are a variety of free apps that can make this easy. At the end of a month, take a look at what you spent and see if those numbers match up to the budgeted amounts. If they don’t, work together to figure out why and discuss how to improve in each category. After talking about expenses, adjust the numbers or the spending categories for next month. When your numbers start lining up, you know you have a solid budget.
Not every couple shares money the same way. Some opt to have a joint account, others prefer separate accounts, and many couples decide on a combination of the two. How you decide to handle your accounts is one of the most important decisions you’ll make. It’s also a decision that requires a lot of discussion. The first step is to agree on what expenses should be paid together. Make a detailed list of the expenses you think should be shared as a couple. You should also take time to discuss how much discretionary money each of you will have to spend. Make a list of what kinds of things each of you might spend money on personally to figure out the discretionary budgets. Once you agree, spending based on the discretionary funds should not be judged or argued. Each partner in the relationship should be free to spend that money as he or she sees fit. Discretionary funds can be allocated in your joint account, or you can create separate accounts for this money to be deposited every month.
A savings account can be used toward big purchases down the road, like a new home. It can also be used to invest in a retirement account. It can provide an emergency fund in case one of you loses a job or suffers an injury. When you start talking about finances and make a budget, consider saving at least 10% of your income early on. This can go a long way toward realizing your goals as a couple.
Try scheduling a financial meeting once a month to discuss your financial situation, your goals and your status on achieving them. If you’re having money troubles, brainstorm solutions together. Discussing money may not always be comfortable, but taking the time to talk about finances with your partner on a regular basis will make it easier. Take a walk to a coffee shop and make this discussion part of a regular, business date.
Creating a structure for handling finances will make it easier to ensure your money is in order and encourages teamwork. Take some time to figure out who should be responsible for paying bills, balancing accounts, monitoring credit and researching large purchases like a house or car. Do you want to do it all as a team? Or do you want to divide tasks? Start by having a conversation about what tasks each of you is good at, likes or doesn’t like and make a financial jobs list. When you have your financial meeting each month, you can report information relevant to the tasks you completed. You may need to try different options to find the best way to tackle your financial responsibilities. Don’t be afraid to switch things up.
If you and your partner need any assistance with financial planning, consider visiting a financial planner together for help.