For Love And Money
Facebook statuses may paint a picture of the perfect life, with family vacations and celebrations, but your married friends are probably hiding the truth if they insist they never fight. With kids, homeownership, and careers, there is plenty of room for disagreement in nearly every relationship. According to a national survey by Money magazine, 7 in 10 married couples argue about money, with the amount spent on frivolous purchases high on the list of grievances. Are you and your partner one of those couples who can't agree on where the money goes? Find out how to address the topic in a healthy and productive way.
Know And Respect Each Other's Spending Styles
One of you wants to save every penny and the other is a spendthrift. This situation is all too common among couples. That's why it's important to take each other's spending styles seriously before fights become too frequent. To manage money together effectively, try to understand why your spouse spends or saves the way he or she does. Family history and how people define wants vs. needs can speak volumes about their spending decisions.
Work With Each Other's Differences
Once you have a full understanding of each other's approach to money, advises the Women's Institute for Financial Education, celebrate (yes, celebrate) the differences. Each of you can take charge of managing the finances in the areas that align with your interests and strengths.
Define Spending Goals
Whether it's saving for house projects, college tuition, or a special vacation, get on the same page regarding financial goals. Start by compiling a list of what you each hope to save for and buy within the next year, over the coming five years, the next decade, and beyond. Then sit together and settle on a few shared goals.
Both partners need a say in how much money is designated for which spending categories. Deciding in advance how much should go toward living expenses, savings, and "fun money" lowers the stress level when it's time to pay up. Money management tools such as Mint can help you budget.
Share An App
A shared budgeting app can help keep both partners on track and on the same system, making money management transparent. Mint and others help couples track expenses together, target amounts for certain categories, and keep an eye on savings.
Use the (Virtual) Envelope System
Mvelopes is a budgeting system built on virtual envelopes, each designated for specific expenses such as groceries, utilities, and extras. By splitting funds accordingly, this app helps couples stay within their means. The Mvelopes website offers a free budgeting ebook and financial advice.
Hold Weekly Money Meetings
Date night and money management may not sound like the most logical fit, but if you're really in the hole regarding financial issues, it's probably worth setting aside time every week to check in on the budget and upcoming expenses jointly. Put the kids to bed and make money talk fun — or at least less stressful — with dessert and a glass of wine.
Think Twice About Merging All Accounts
Although many married couples manage their money jointly, merging or sharing all accounts can be problematic. Each half of the couple has his or her own credit score, regardless of whether accounts are merged. Taking charge of paying certain bills, with your name on the account, helps build your credit score, which can be instrumental should you ever need to borrow money on your own. Separate accounts also can be beneficial if you have a lot of cash in the bank. The Federal Deposit Insurance Corp. insures up to $250,000 per account, so maintaining separate accounts can protect more money.
Don't Hide Expenditures
Nearly 60% of spouses aren't honest with each other about some of their spending, according to iFidelity, way up from the 22% who copped to it in 2014, and they're holding back to avoid a fight. Experts recommend defusing the secretive shopping issue by allowing each partner a certain amount of "play" money that can be spent with no questions asked — and keeping in mind that 19% of partners who live together are hiding money, Creditcards.com finds, while 20% think that's worse than being cheated on.
Look Forward, Not Backward
Money magazine also found that 62% of husbands believe they are better at retirement planning than their spouses. This is all the more reason for both partners to take an active role in discussing the future, from retirement to college tuition to emergencies. Review investments together two or three times a year and make shared decisions on savings priorities and targets.
Consider a Finance Coach
If you and your spouse just can't come to a mutual agreement over money without things getting heated, it may be time to call in a financial coach. A small payment for extra help may save you both thousands of dollars down the road and, critically, keep the peace.