Couples just starting a life together often struggle with melding two money management styles into one cohesive couples’ strategy. Money issues are still the number reason for marriages or relationships to end. However, a few simple steps can help couples avoid the blunders that can lead to money problems.
Where should newlyweds start with their financial planning?
The first place to start is to have a conversation about each other’s past financial history. It is really important to start your joint financial life together knowing everything about each other’s credit, current indebtedness and other pertinent financial matters such as savings and insurance coverages.
What is important for each person to understand about each other?
One of the key things to understand is each person’s money personality. People can be savers, spenders, risk takers, security seekers or not involved at all. Knowing your money personality and that of your spouses is important when discussing financial matters. You will understand better their reasons for how they want to spend and save the money that will be part of your relationship together.
Can developing a joint budget be beneficial?
Yes because it will require a discussion of how each person wants to spend and save their incomes. Having this discussion is key to avoiding arguments over money. The budget process will allow for discussions on many important topics that might seem trivial early in a relationship but grow overtime. This budgeting process needs to be down over the course of several discussions and should be reviewed on regular basis when financial circumstances change.
How you can you avoid arguments about spending money?
One of the best ways is to have a limit on what each can spend without talking to the other spouse. The reason is that some people might think anything over $100 should be discussed and the other person might think unless it’s over $1000 you don’t need to talk about it.
What is your recommendation regarding the comingling accounts or keeping everything separate?
I tend to favor the idea of joining accounts and making it an “ours” not “his and hers” situation. Splitting everything 50-50 can get complicated and if one spouse makes more than the other it can lead to one spouse having more power in financial matters. This then becomes a problem for other aspects of the relationship and can cause a rift that is not repairable.
What other planning mistakes do newlyweds often make?
They don’t have a discussion on long term goals and what is important to each of them individually. If one wants an expensive house and the other doesn’t care about the house but wants lavish vacations every year, their financial goals are going to be in conflict. This needs to be resolved or money arguments are going to ensue. And longer term planning is also critical to discuss early in the marriage.
What is the most important tip for married couples to have financial bliss?
Without a doubt it is having regular money discussions and being willing to compromise so that you don’t fight about money all the time. Harboring ill feelings about your spouse’s spending or lack of spending is not going to provide for a healthy relationship long term.
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Categories: Money Matters, Relationships