Have you found your life partner? If you recently got married, you and your spouse are ready to share a home and build a future together. However, now that you’ve committed to spending the rest of your lives together, you need to agree on how you will be spending your money as a couple. Statistics consistently show that money is one of the main reasons married couples fight, making it important for you to discuss your financial habits and align your mindset.
In other words, a good marriage not only requires maturity, compromise, sacrifice, and transparency, but also agreement on future financial goals. Through honest discussion and proper financial planning, you and your spouse can overcome any financial hurdles you may face and enjoy a stronger relationship in the process.
According to Scott and Bethany Palmer, coaches and authors of founders of the Five (5) Money Personalities, over 70% of divorced couples cite financial issues as the number one cause of arguments; financial discord spills over into every other area of any relationship.
There’s no debating that lack of money is now the leading cause of stress in many relationships. Money is one of the most common reasons why couples argue and live unhappily.
Use these tips to ensure financial harmony between you and your partner:
Get to know your partner’s money mindset
As a couple, it is important that your money mindsets are aligned, meaning that you share similar beliefs and thoughts about money. Is money a means to securing your financial future? Or a means to pleasure or freedom? Do you prefer spending over saving?
As you start your new life as a married couple, do you and your partner share similar financial goals or are you mostly thinking of your individual needs?
By simply being aware of your partner’s and your own mindset, you can work to find a compromise that suits you both, avoid future conflicts and build a healthy relationship.
Openly discuss your finances with your partner
The topic of money is both a personal and emotional one. Talking about it can be stressful especially if you’re newlywed, but openly and honestly discussing the state of your finances with your partner is very important.
Don’t be embarrassed about being in debt, having a poor credit history, or simply having a bad money habit. How do you expect to build a future together if you can’t discuss something as essential as your financial future? An honest discussion about your spending habits will also help you work towards achieving similar saving and spending habits and shared goals.
Set your financial priorities together
Together, start by creating a list of spending priorities including those that are essential to you and your partner individually and those you share as a couple. Identify your needs as a couple or family and list fixed expenses and top spending priorities such as rent or mortgage payments, food shopping expenses, insurance, fuel, and education. Are there any loans or other debts you are paying back? How about saving for your kids’ education and your retirement? Then do the same on an individual level. This list will provide clarity and a balanced spending track for both of you.
Budget and track your expenses together
Create a budget and track your incomes, expenses, other spending, and savings. Work together to save at least 20% of your combined income for any emergencies. Are you saving up for a car? Review your budget to see you can work it together to pay for it. One option to avoid financial stress is to divide your bills according to your income, whereby the partner with the highest income contributes a larger percentage of their income to shared expenses.
Consistently and regularly tracking your spending together will help you identify, discuss, and correct spending patterns that don’t match the agreed upon plans.
Pay it forward and agree on a percentage of income you will donate to a cause you’re passionate about. Maybe there is someone in your close circle, such as a family member facing financial challenges who may need a hand.
Avoid taking out loans for celebrations and vacations
Social media ads and friends’ stories may tempt you to plan a celebration or trip that you’re not ready for financially. Most of us love to celebrate and travel but planning for them according to your level of income and budget, to avoid the financial stress of having to pay back loans for months into the future. Treat yourself with a vacation or celebration every once in a while, but make sure you budget for it and then stick to it!
Rent or buy a home according to your income
When moving in together, think smartly before deciding whether to buy or rent a house. Look at your combined incomes and consider using a financial calculator to enter the amount of your monthly income and the savings that you have. Based on the outcome, decide whether It’s smarter to rent a house or to use that same budget to pay installments on a housing loan for a house which will eventually become yours.
If you are unable to buy your dream house today, that’s okay – create a savings plan so that by the time that your family grows bigger, you have the means to buy a larger home.
Open a joint bank account
You are sharing a whole life together, so why not share a bank account? Not only can it help you to better manage your finances, but it also creates a “what’s mine is yours” mindset that helps build trust between you and strengthens your bond.
Financial strain on a relationship is unavoidable at times, but the tips above will help you to overcome financial challenges, strengthen your relationship, and enjoy a healthy financial future together. By doing so, you will also set a good example for your kids, teaching them to appreciate your hard work and the value of money early on in their lives.
Why should your relationship suffer from financial challenges when you can enjoy financial wellness?