Whether you have been living together for years or just recently set a wedding date and want to be roommates first, developing solid money management skills as a team is important. Just like any skill, there are those who are naturally better at handling the financial aspects of a partnership and some who need lots of practice. It is best to address how you and your partner feel about money in general, because the #1 cause of marital stress is over financial concerns.
Discussing aspects such as budgeting, saving, and how spending decisions are made, allows couples to gain insight into their future partner’s attitude towards money. According to the award-winning financial planning firm, LearnVest, this is an important bridge to cross considering that 3 out of 4 couples can not agree on money and expenses. The firm has also discovered that 80 percent of couples hide their purchases from their partner! Learn how to avoid future financial tension by using these simple tips:
Establish expenses and deadlines
Rather than making one member of the team solely in charge, sit down together and go over the monthly expenses. Discuss how they will be divided and how they will be paid, such as with a check or online draft. Next, set a deadline, mark it on the calendar and respect it. If one person is making the total payment, the other needs to get their portion in on time. Do not make your partner have to ask for your share; be respectful and honor the agreed upon amounts and deadlines.
See related post, “Pros and Cons of Joint vs Separate Accounts for Couples.”
Avoid financial coercion
Unfortunately, even though the issue of spending may have been discussed several times, the occasion may arise when one tries to talk the other into deviating from the plan. This usually takes place in a whirlwind of excited impulsiveness. The partner who is ready to splurge may use a variety of persuasive tactics to get their way and may easily succeed. The best plan is to discuss joint purchases that are over budget and save up for them instead.
Don’t forget about that rainy day
It’s a fact of life – the unexpected happens. Couples should always have an emergency fund in place to help cushion the blow from these surprise setbacks. Ideally the emergency fund should cover a full three months of expenses for each person. Job loss, illness, accidents, major car trouble, and surprise home repairs, are just a few examples of things that can wreak havoc when there’s no financial wiggle room. It is also important to take care of this special fund together, so there are no hard feelings, especially when the one who failed to contribute is the one who needs it the most!
Create unified savings goals
It should come as no surprise when one partner has conflicting ideas about how joint funds should be spent. Even those with similar values and upbringing may place value on different things and that’s OK. Everyone should be able to spend a little money on the things they enjoy. However, when a couple agrees to manage their finances jointly, the amount for differential “must-haves” should also be established. Hopefully, that will prevent anyone from joining the ranks of the 80 percent of couples, already mentioned above.
Discussions about finances, spending, budgets, and other money matters should be ongoing
Even though guidelines may have been established, situations change and it becomes necessary to adjust financial strategies. Taking the time to sit down once a month to look over the monthly bills and explore both short and long-term goals is a very healthy habit. This is vital for couples that may have a home purchase on their horizon. Taking the time to acquire the skills needed for making what is usually the largest single purchase in one’s lifetime will be time well spent!