According to a Fidelity Investments Couples & Money study, money tops the list of reasons for relationship conflicts, with one out of five participants agreeing that it is their greatest relationship challenge. For married couples, it can be stressful to transition from managing finances as an individual to managing them as a couple. For example, managing money as a couple can be tricky when your partner has past debts and no clear financial plan.
Therefore, to avoid disagreements, financial insecurity, and debt, you must consider doing the money talk with your significant other. As they say, even though money cannot buy happiness, it can surely rent it.
Here are seven ways you can effectively manage money with your romantic partner.
1. Communicate
Most couples avoid talking about money for fear of brewing conflict. However, it is best to face your insecurities and set things straight. Communication helps partners with financial differences get on the same page. There are various things you should talk about once you become a couple:
Individual and couple debts
As a couple, you should be clear on debts and plan ways to help each other pay them off because they may affect you financially as a couple. For example, if you took a debt together or individually for your wedding or mortgage, you should make it clear so that you have a clear repayment plan.
Individual vs. couple goals
One partner’s plans should not clash with your couple’s goals. For example, your partner’s business they’ve been building two years before you met, should not be overlooked because you want to start yours. Communicate and set your priorities according to the goals essential to you at a given stage of your relationship.
Income
Contrary to popular belief, household expenses are a partnership thing, so be honest about your income to make planning easy. Do not misrepresent your earnings to evade responsibility. At the same time, do not inflate your earnings, or else your plans as a couple will crumble because of a lack of funds to cater to your huge budget.
Communication is vital for couples, and it will help you strategize at different stages of your relationship, like when securing a home, starting a business, parenthood, and retiring. Setting aside time and discussing money matters at least once monthly is very healthy.
2. Get Professional Guidance
Sometimes you may need a financial advisor to help manage your money. Financial advisors are well-trained to offer comprehensive guidance on saving and budgeting. They can also help you with your investments because they better understand the financial market and economic conditions. Therefore, if you both have little or no financial knowledge, consider asking a financial advisor for help. Also, if you have financial knowledge but have difficulty managing multiple businesses, you should reach out to a professional. If you are looking online, use Nuwber to verify their identity because that is where scammers are lurking.
3. Budget as a Couple
If you want to achieve your financial goals, you must budget as a couple. Budgeting together has the following benefits:
- Less conflict as everyone can express themselves, negotiate and meet halfway.
- Accountability. Budgeting as a couple means every single penny is accounted for, so there is no suspicion.
- It is economical because you agree to only spend on what is necessary at that time. Budgeting together helps keep your spending in check because your spouse may shape your spending habits.
4. Have a Joint Bank Account
Couples are advised to pool their finances into one bank account to avoid suspicion and dishonesty. Unless you do not have financial goals as a couple, your partner’s money is your money, and vice versa. When you see what you collectively have, it is easier to budget for your kids’ education and healthcare. Using separate accounts in managing money in your household is a recipe for suspicion, disagreements, and dishonesty.
5. Financial Management Education
As a couple, you can go all the way and become a professional in financial management by taking an online or physical class. If that is not possible, there are boot camps and workshops that you can attend together to learn financial management. Studying is essential as you get to know the principles and intricacies of financial management and always act from an informed standpoint. This can help reduce disagreements and build an efficient financial model for the rest of your family’s years.
6. Saving and Insurance
Saving and insurance are good money management practices that will prepare you for any unknown future crisis. For example, the COVID-19 pandemic hit people with no emergency savings in the worst possible way. To cushion your marriage against unfortunate times like illness, unemployment, and tough economic times, you must allocate a percentage of your funds to a savings account. Individual saving is also advised to secure yourselves from any unfortunate event further. Again, you need something to fall back on when the marriage fails or, worst, lose your partner in a tragic event.
Healthcare, life, homeowners, and auto insurance are highly advisable as a couple because of the risks that face health, housing, and vehicles.
7. Designate Financial Responsibilities Equitably
Both partners in a relationship must be equally responsible in catering for expenses. However, most couples do not earn the same amount of money. Therefore, it may be unfair for your partner to cater for 50% of the bills if they earn way less than you do. However, considering the principle of equity in financial management, you are supposed to designate financial responsibility in a fair way that aligns with your strengths, abilities, and interests.
Conclusion
Global economic volatility, inflation, and recessions are all arising factors in the contemporary world that have forced couples into looking for strategies to manage their finances effectively. Without managing finances, couples may suffer debt, financial insecurity, and the inability to afford essential commodities like food, shelter, and healthcare. Therefore, the time is now to start strategizing on better money management tactics to secure your short-term and long-term financial goals.
