With Valentine’s Day just around the corner, we’re reminded of all the fun, exciting and extra-special moments we share with our spouse or partner. Certainly, there are a lot of rewarding experiences that can come with being in a relationship. But along with the benefits — whether they’re emotional or financial — come many responsibilities. Of these responsibilities, one of the most important is the need to keep our finances in order. Money is definitely not a romantic subject, but it’s still very important for couples to address.
As I’ve seen many times, finances can be a major source of stress in a relationship. It’s a topic most couples may seem to prefer avoiding entirely, but talking about money is critical. And even though a conversation about money can be stressful at the beginning, it can also be extremely rewarding when a couple connects and is able to communicate about their finances.
To make it a little easier for you and your spouse or partner to begin a discussion about money, consider these tips to help you navigate your finances while keeping your relationship strong.
Get on the same page financially. It is rare for couples to share all of the same goals. So, start your conversation around short- and long-term goals each of you may have. When was the last time you talked to your spouse about what your retirement looks like? Have you spoken about what you want to provide for your children, or other dreams you may have that require a financial outflow? Plan a date night to start this conversation. Start outlining your goals and listen carefully to what the other person wants. It is important to realize that, because your goals may not match perfectly, there will need to be compromises along the way.
Divide and conquer. It’s not very romantic to think about a couple in terms of a financial relationship, but keeping the finances in good order requires that both partners do their part. I suggest trying to match interests and skills with the tasks at hand. If you’re punctual and detail-oriented, you’re a good candidate to pay the monthly bills. If you’re more of a big-picture person, you may want to focus on long-term investing. No matter how responsibilities are divided, ongoing communication is essential. Have a finance meeting every quarter to understand how things are going.
Spend less than you make. Without consciously tracking income and expenses, it’s very easy for spending to get out of control. I suggest dividing money into a joint bank account for family bills and two separate accounts for individual spending. How you allocate income to those accounts needs to be discussed and agreed upon. Of course, it’s important that whatever system you choose works for you both, and couples run the gamut from a larger degree of financial separation to total financial integration. The vital element, however, is that you can identify and efficiently evaluate what’s coming in and what’s going out. Watch the balances on your accounts and on credit cards to identify any spending trends that aren’t in sync with your agreed-upon goals. Overspending is not a habit that will just go away on its own. Review your spending on a regular basis so you both understand where things stand.
Take advantage of workplace benefits. With two working spouses, it is important to review the employee benefits available to each. If health insurance is better through one employer (economically, medically or both), take advantage of it. If life or disability insurance is offered, make sure to participate at the level your family requires. Be aware of other benefits as well, including retirement plans and potential company matches to your retirement plan contributions; paid leave for family events, sick time and vacation; and support and discounts that may be available through your company’s partnerships.
Set up an emergency plan. You never know when the unexpected will occur. Bad things can happen to anyone, and they can be very disruptive to your normal life and financial routines. Be prepared. That means not only having savings on hand equal to 3-6 months of family expenses, but also keeping a current list of all your bank accounts, bills, insurance contacts and passwords. Make it easy for your partner to take over your financial duties if needed.
Making the effort to connect and communicate about finances can take a couple quite a long ways. Dedicate time and energy to this, and commit to reviewing your plan on a regular basis. Removing this kind stress from your relationship will allow you to enjoy all the fun and excitement ahead.
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The opinions expressed by featured authors are their own and may not accurately reflect those of the BAM ALLIANCE. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice.
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