Aside from what movie to watch next on Netflix and deciding where you should eat next, finances also get in the way between two very much in love couple. How would you handle your finances as one?
Managing your own finances is difficult enough; combining your expenses and splitting it 50/50, especially when one earns more than the other, can cause some money squabbles.
Don’t let poor money management skills put a dent on your wallet and relationship. Start acting now; get your finances on track as early as now. Don’t wait till one of you hit rock bottom, bringing the relationship down along.
Keep your finances straight, your money disagreements to a minimum, and avoid these 5 most common financial mishaps couples make.
1. Not talking about finances. You have the time to watch Netflix all day, go people watch at the park, and go to a road trip heading nowhere. The same amount of time should be spent on discussing your finances.
Avoiding the money talk won’t save your relationship from falling apart, because of your money problems. We know, talking about it feels awkward at first but you need to. Would you rather wait til one of you gets in credit card debt before you talk about it?
Make the talk easier; see it as a money date where you discuss your finances (e.g. household expenses, utilities, budget status, savings fund status, bills payments, etc.). Like other dates, both of you should make an effort to participate, listen and give your opinions on it. Be honest and don’t let the date end in a fight.
2. Not being honest. Neglecting each other’s money background, spending habits and financial troubles won’t help your financial situation. You’re married or already in a serious relationship, there’s no need to be embarrassed about each other’s financial woes.
Know your partner’s money background. If s/he grew up in a rich family, s/he may not have the initiative to save for rainy days. If s/he grew up in an average home or in a family struggling to make ends meet, chances are s/he knows the value of money, knows how to save for unforeseen expenses and stretch the last budget.
You’re a team now. You’ve got to lay everything on the table including your money history. No more hiding your money troubles, loans and debts, income info, and the works. You’re a team and you’re going to tackle them together, not separately or secretly.
3. Not setting financial goals. The first step is to discuss your money history and issues. Second step is figuring out how to resolve it and avoiding on falling on the same trap again.
Once you get a grasp of each other’s financial situation, only then you’ll understand their financial goals. When setting your common financial goals, communication in the process is essential. Write down your goals and if there are differences, find a middle ground where you’ll both agree on. Once you have set it up, start prioritizing. Plus, don’t forget to track your progress.
4. Creating a budget that doesn’t work. Don’t just implement a budget system that isn’t favorable for the both of you. Even more so, don’t create a budget without discussing it with your better half.
First off, discuss how much each of you make per paycheck, what you own, and what you owe. Know your non-negotiable expenses (e.g. car payment, rent, etc.), budgeting around these is easy since the payment is steady.
Do remember while you’re creating a budget to always put in register each other’s say in the budget and financial management tactics. Just because the other one earns more doesn’t mean s/he has the upper hand and responsible for paying most of the bills. Discuss it with each other.
5. Having one person responsible for both your finances. As mentioned in the point above, the one who earns more isn’t entitled to have more control over both your finances. The same way goes when only one person is dedicated to managing your finances.
Again, you’re a team—work as one. Also, whenever possible, go on your “money dates” and sort your finances and budget system out. This way, no one gets left behind and taking more workload over the other.
Don’t let your resentment grow toward each other just because of your financial troubles and differences. This can be worked out and discussed.
About the Author: Chie Suarez has spent time figuring out ways on saving money and stepping away from her go-to retail stores. She then became a writer for Speedy Money which offers hassle-free loans services.