One of the most common reasons that we see for bankruptcy and unmanageable debt is a disconnect between married couples or partners.
When we’re single, it’s much easier to notice the trends of money coming in and going out. We know exactly how much money we make, and therefore, what kind of lifestyle we need to maintain (usually).
However, the challenge of managing money is compounded when two people are sharing finances and living costs. Sometimes, one partner is used to having leeway to make impulse purchases, while the other has to keep a tight reign on the budget in order to make ends meet. There might be a disagreement on values, and what it’s worth spending extra money for. You might even experience fights over what the best plan is when you find yourself in trouble financially.
While it would be nice to have a single, guaranteed-successful roadmap for handling finances as a couple, the truth is that there are as many different techniques as there are couples. Some people continue to keep separate accounts, and simply split different expenses like insurance, housing, and groceries. Other couples pool their resources and just put one partner who doesn’t mind money matters in charge.
However you decide to manage finances as a couple, there are a few rules of thumb to keep in mind across the board:
Set a family budget
Take time to sit down together and take a look at your current finances. What are your monthly costs? What’s your monthly income? What’s your plan for flexible costs like groceries and recreation? Take some time now and then (perhaps every quarter) to re-examine the budget and see whether you’re over or under each month.
Communicate about financial goals and wishes
Does one of you want to be able to stay at home once you have kids? Does the other want to be able to invest money in a startup business? These are big financial changes, so you need to both be on the same page. Discuss things that are farther in the future: when you’d like to be able to retire, and whether you want to move to a bigger house in 3 years.
Set a spending limit
It’s exhausting to consult about every little run to Starbucks. However, you want to be in agreement if one of you decides to spend a bunch of money on a new entertainment center or something of the sort. You don’t want to be shocked by your bank statement because your partner purchased $600 shoes last month without telling you. In order to prevent problems like this, set a spending limit that you both agree on. Any purchase over a certain amount of money has to be cleared by the other person.
Make an effort for both partners to understand finances
Even if you decide that one person should be the primary decision maker or budget-setter, you both need to have a basic understanding of your finances.
Treat each other as equal partner
Even if one person makes more than the other (or one person is staying home with the kids while the other holds down a job that provides financially for the whole family) you are partners. One person’s contribution can’t be valued less than the others’. Each partner should have an equal say in how the finances will be handled.