From “Yours and Mine” to “Ours”
Money matters can be a difficult subject, especially for young couples and newlyweds. In fact, a recent survey by the American Institute of Certified Public Accountants showed that money causes more arguments among men and women than other typical domestic disputes.
So where do couples go wrong?
“Differences over money management and spending patterns can be a major issue of contention between couples,” says Trevor Bush, senior vice president and manager, Arizona retail banking division at Washington Federal. “The reality is that everyone manages their money different, which means that when a couple starts spending together, there is a potential for conflict.”
According to Bush the most common financial problems new couples encounter include:
- Building up dept;
- Being financially separated;
- Not having a plan.
So, how can couples make it right?
“The first step is to communicate regularly about how money is going to be spent,” says Bush. “To resolve financial problems, couples need to remember that they are partners on the same team; so, agree to work cooperatively and respect each other’s opinions on how to move forward together.”
Other things for couples to consider include the following.
Set Goals Together
“Most personal finance problems arise when partners don’t talk to each other about individual or common goals and plans to achieve them,” says Bush. “But those minor money differences can be overcome as long as you have a strategic plan in place.”
Bush recommends couples work together to prioritize financial goals and then determine the steps needed to get there. Goals may include purchasing furniture to paying off a mortgage and even having a retirement plan.
Create a realistic budget
In order to reach your shared financials goals, create a mutually-agreeable budget that outlines what amount of money will go towards household bills, food, entertainment, health and travel. Also, track where your money goes by maintaining a list of monthly expenses.
“Living within your means requires discipline and maybe even some sacrifice,” says Bush. “But in the long run your wallets and bank
Deal with debt together accounts will thank you.”
Don’t let credit difficulties threaten your relationship as a couple. If one partner comes into the relationship with debt, discuss – together – what the best strategies are for paying it off.
“Like it or not, your partner’s debt can become your problem and has the potential to affect much more than just your relationship,” says Bush. “So agree to talk often about finances and tackle any outstanding debt together to avoid any issues down the road.”
Remember to save
“If you’re looking to build a strong financial future together, then consider the benefits of opening a joint savings account,” says Bush. “Life is unpredictable and costs can sometimes be difficult to anticipate, so having a reserve fund is always a smart move for couples.”
Saving money, no matter how large or small, creates a feeling of abundance. Decide together how to save money as part of your financial management plan. Whether it’s putting change into a spare jar or allotting so much per month to certain savings accounts, beginning to save early will benefit you in the long run. You could easily create multiple savings account for different objectives like saving for a new home, vacation, or education.