Studies show that 91% of married couples in the U.S. say it is important to talk about finances and individual financial history. Yet, 26% admitted they go out of their way to avoid talking about money with their spouse.
When the subject of money comes up, people tend to get squeamish. This is true even for newly married couples. Research conducted on 100 husbands and 100 wives revealed that, while the subject of money wasn’t the most common reason for marital conflict, it did account for the most unresolved marital issue faced by couples. This study highlights just how uncomfortable it is for couples to talk about and resolve money-matters.
You and your spouse should be able to talk about anything, especially if you are married. Don’t let your marriage become troubled because of issues related to money. Here are 5 secrets to successful financial planning you need to know.
While you were dating, money wasn’t spoken of very much, save for who was going to pick up the check at the end of a date. Now that you’re married, money is a topic that must be discussed. This can be awkward for couples.
It could be that couples find it uncomfortable to talk about their past experience with their finances, to reveal credit card debt or student loans still owing, or perhaps they would prefer not to know whether their spouse earns more than they do.
Regardless of any awkward feelings about money, married couples need to get their finances in order to help avoid unnecessary debt and to get a household budget in order.
One way you can open up to one another about your finances is to find some common ground. Are you a spender or a saver? What was your financial situation growing up? What was your first job and what did you spend your first paycheck on?
These are fun questions to jump-start the conversation. Revealing your answers to each other will give you a better idea about your partner’s financial mindset.
Part of financial planning for married couples involves discussing debts.
A study of 1,010 newlywed couples revealed that bringing debt into a marriage had a negative impact on marital quality. For this reason and others, it can be embarrassing to reveal your debts to your partner, but it must be done.
When you get married, your partner’s debt becomes your own and vice-versa. You cannot solve your debt problems if you aren’t honest about how much you owe. Discuss any personal loans, government debt, or credit card statements you have accumulated.
In a survey of partners in debt, 87% of men and 80% of women said they would remain in their marriage even if their partner had a substantial debt owing or were undergoing bankruptcy.
Rest assured, your partner loves you for you, not for your wallet. Being honest about your financial situation is essential for a healthy, happy marriage.
Setting a budget is essential for financial planning in marriage. Sit down with your spouse and make a list of all of your monthly earnings compared to your bills. Things you should include in your list are:
It is great for newly married couples who are having trouble paying their bills, who find it difficult to pay off debts, or who want to start saving for a home or retirement.
Creating a budget with your spouse is a great way to track your money. Seeing your incoming and outgoing finances on paper also helps couples to live within their means, reduce debts and other monthly costs, and set reasonable spending limits.
There is no written rule that says just because you are married you now have to have to join bank accounts. This decision is entirely up to the individual couple. Here are the pros and cons of joint or separate banking accounts.
Joint Bank Accounts
Having a shared bank means there is less hassle. Money enters and exits the same account, making it easy to track your finances. It is beneficial for couples where one earns more than the other.
If spending styles vastly differ, having a shared account can be frustrating, especially if you do not communicate about your finances. This means one may be spending while the other is paying bills, which can result in an overdrawn account.
Of course, a shared account also complicates things if you were ever to get a divorce. A shared account also makes buying gifts more difficult.
Separate Bank Accounts
This option gives you more financial independence. Your money is yours to do with as you will. It also offers you some autonomy in your spending. This can also be beneficial for maintaining your personal credit score.
Splitting bills and paying for shared expenses like vacations or car repairs can become more complicated when accounts are separated. Having separate accounts can also leave your spouse in the lurch if they earn less than you do.
It is important to weigh the pros and cons of both options, as each has benefits. You should also take your personal circumstances into consideration before making your decision.
For example, do you work while your spouse stays home to care for your children? If so, it would be beneficial to have a shared bank account in which they can access finances when they need them, instead of asking you for an allowance.
Sometimes life throws you a curveball that may leave you in financial limbo. This could include losing your job, becoming physically ill, having an accident, or experiencing a natural disaster in your area.
Planning ahead will help you avoid any financial hardships during these times. Even if you choose to keep your bank accounts separate, it is still beneficial for couples to have a joint bank account specifically for savings.
You may choose an amount for each partner to add to the account on a monthly basis or set a cap where both will contribute to the account until the goal of $5,000 to $10,000 has been reached.
When life takes an unexpected turn, it is comforting to know that you and your spouse have a nest egg put away to help support you.
Many couples find it beneficial to have various savings accounts for different aspects of life such as saving for retirement, family planning, traveling or buying a home.
Financial planning for married couples should be an exciting journey, not a stressful event. Creating a budget, saving for retirement and unexpected expenses, and having regular conversations about money are beneficial for marriage.
By talking about your finances and getting on the same page about spending and saving, you will improve your communication with your spouse and reduce financial stresses.
Author Bio: Rachael Pace is a relationship expert with years of experience in training and helping couples. She has helped countless individuals and organizations around the world, offering effective and efficient solutions for healthy and successful relationships. She is a featured writer for Marriage.com, a reliable resource to support healthy happy marriages.
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