Managing Money In A Marriage
Managing Money in A Marriage – Can It Be Done Successfully?
It’s a proven fact that when it comes to managing money, very few couples are soul mates. One of you will be a saver and the other will be a spender. In conjunction with that, one is more conservative while the other is probably more prone to be more of a risk taker. Taking those facts into account, both are convinced that their way of thinking is the right way. Wow!
Is it any wonder that discussions related to managing money can quickly erupt into an argument? How in the world does one diffuse a powder keg like that? There is a way that a couple can come to an agreement on managing money that will be acceptable to both.
First of all, understand that no one agrees with the other on all matters, and its okay to disagree on certain issues. When it comes to managing money, there is always room for more than one idea. One individual, more than likely, will not always have the correct solution every time.
The most important thing to remember is to keep an open mind, and let the other spouse communicate their ideas. And don’t become critical or cynical if you disagree. No married couple is in complete agreement, on all issues, especially managing money, all of the time. Furthermore, you don’t have to be.
It’s essential that each partners feelings about managing money is treated with respect and understanding. If not, you’ll be hard pressed to formulate a budget or a spending plan that you both can live with and follow. The idea is to give and take until both partners are comfortable and satisfied.
For instance, if the one who is a saver needs to be financially secure in order to be happy, then the couple should allocate a certain amount of money each month for savings. Conversely, if the one who is the spender is only happy when he/she is able to really enjoy life, then a certain amount should be budgeted for a few fun purchases.
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The couple, however, needs to come to an agreement on certain important financial goals such as retirement funding, providing college funds for the children, and perhaps an annual vacation that can put a spark back into the marriage.
Above all, the couple needs to have space for a feeling of individual independence. Each spouse should have a small amount of money that they can spend or save without having to consult the other. They can do this by having a small individual account in their own name.
A joint account to cover household expenses plus the long term goals such as retirement and college can be maintained with each contributing.
It’s generally a good idea for each spouse to establish their own individual credit record in the event they have to borrow individually one day. That can be accomplished by maintaining one credit card individually and then a joint card for household expenses.
When it comes to actually paying the bills, the couple needs to establish a system that is fair to both. Many couples establish a joint checking account to pay the various household expenses with each making a contribution based on some formula.
Other couples divide the bills and then pay them from their own individual accounts. No one system is correct. Whatever the couple agrees on and is comfortable for both is the one that should be used. Managing money is not rocket science, its common sense.
No matter what system is used, it’s important that the contribution to a joint checking account, or dividing up the bills, is equitable. Usually the fairest method is to base it on each individual’s income as a percentage of the total.
Investing should also be done as a team. If you each have retirement accounts at your employer, you can decide together on the portfolio mix. If investing doesn’t feel comfortable, it might be a good idea to meet with a financial planner who can handle this for you.
Having mentioned the above, the most important is communication. This sounds easy to do, but in fact, it is usually very hard. Many couples become so busy with work, raising the family, etc, and they barely have any time to talk to each other.
When it comes to managing money, a couple should schedule meetings throughout the year just to discuss the family finances. During these meetings, both spouses must feel free and comfortable to voice their opinions without any critical responses from the other spouse. As we stated earlier, you should agree to disagree on some issues.
Managing money in a marriage is likened to a financial partnership, and as such, can only be successful if it’s based on cooperation and a lot of compromise.