Financial disagreement is a leading cause of marital issues everywhere. Stressing over money happens to everyone, but the situation can be worse when sharing finances with a life partner. Even though talking calmly about money trouble helps a great deal, it is not enough. Couples should find practical ways to handle specific issues to avoid falling into the same rut. The problem of marriage and money is an old one and, over the years, it has become clear that some common mistakes aggravate the situation.
Failing to Talk About Money before Marriage
Tackling the money talk before starting your life together can save you a whole lot of misery. Before you get into a committed partnership, you should know where your partner stands. It may come as a shock to find out that your spouse defaulted on a loan that ruined his/her credit, and that means trouble for the both of you. Your partner may also have a spending problem that did not come up during your dating period. Don’t put off the conversation about finance until it is too late.
Having Separate Accounts
The debate on whether couples should merge finances is a tricky one, and there is no right answer for it. On the one hand, having separate accounts gives individuals the autonomy to handle money however they see fit. Merging finances, on the other hand, simplifies things when it comes to making the big decisions such as funding a mortgage, paying for college or getting loans. It is possible to have a little of both- have a joint checking account for expenses and separate individual accounts. You can the start putting funds in one account over time.
Different Financial Objectives
Understanding the goals that each person has is important when sharing lives. It can be hard when one person wants to start by buying a large home when it is not affordable at the moment. Evaluating both your financial goals will help establish a blueprint on how to spend and grow your money. It will be easy to save for a vacation if a couple agrees that they only have to take one every year.
Not Having a Plan
Budget is everything when it comes to managing finances. One of the most frequent accusations you will hear when couples are fighting over money is overspending. Without a budget, it is easy to overdo it with purchases and spend money that you don’t have. Even though males and females have different spending behaviors, the threat of dipping into savings is present in both. A married couple should know that this amount is for daily expenses, this one goes to long-term saving and what not. Sticking to a budget can eliminate those recurrent fights.
Not Planning for Emergencies
Even when managing a small amount of money, putting money aside for unexpected spends can save you and your spouse a lot of trouble. Emergencies can be anything from unexpected medical bills to emergency travel. Having an emergency fund prevents you from using your savings or getting quick loans that will only land you in debt. However, know what counts as an emergency to avoid misusing the funds.
Saving for the future requires putting your monies to good use. Picking an investment can be confusing what with all the options available. It can also be an issue when a couple has different financial habits. For example, you may be a risk taker while your spouse is the complete opposite. It is best to set out objectives and then analyze how much risk is acceptable for both of you. If possible, a financial planner can help a great deal when picking an investment for your retirement.