All the wonderful traits that make you compatible as a couple may not necessarily make you compatible financially. According to Fidelity Investments' Couples and Money Survey, 1 in 5 couples identify money as the biggest challenge in their relationship. However, while money can be a sensitive and personal topic, it doesn't necessarily have to be a point of contention. Here are some tips to help facilitate these discussions and navigate the financial maze as a couple.
1. Decide on a plan of action.
Some couples keep their household finances separate, some combine everything, and some combine both. Create a plan that works for your relationship and stick to it, whatever you feel most comfortable with, but be sure to review your plan regularly.
Whether you manage your finances separately or in combination, it's important to have a clear plan for how your expenses will be divided. We recommend addressing these questions with your partner to make sure you're on the same page. Are you going to share everything? Are you each responsible for certain bills? How do you work towards your savings goals, together or separately? Who pays for dates and surprises? Who? It's also important to discuss what will happen if someone loses their job or gets a raise. Will your plans stay the same or change? It is very important to have a plan that is flexible enough to change over time.
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2. Communication, communication, and communication.
Not discussing your finances regularly can have a negative impact on your relationships. Problems usually arise when someone feels disrespected, taken advantage of, or unvalued. You can minimize this tension in your relationship by having an honest conversation about how your financial life is working as a couple. Schedule time to sit down with your partner regularly and review your budget, spending patterns, savings plans, and pain points regularly. We recommend doing this monthly to avoid any disruption to your financial planning.
I think it's even more essential to have these regular checkpoints when one person is in charge of the majority of the finances. We combine everything at home, but even though the financial tasks are designated as my responsibility, I make sure to keep my girlfriend's husband informed. When I pay the bill, I tell him: “I've been spending a bit too much lately, so let's try to cut back on my spending.” or “Your paycheck seems a little different – could you please check your pay stub and see if any adjustments need to be made?” or “This month. It seems like you did well to stay within your budget. So you have some money left over. Maybe put it into savings, add a little to your 529 account, or just treat yourself to a weekend away with your family. Let's make plans to spend the day with the kids?
My husband is usually oblivious to this, but I appreciate the transparency and keeping him in the loop.
3. Set priorities and budget.
There's always the saying that one person in a relationship is the spender and the other is the saver. This makes sense because opposites attract, but it doesn't have to be all or nothing. Once you as a couple have determined your overall priorities, it will be easier to plan and budget.
I know a lot of people hate the word budget, and I completely understand that. So change your mindset and reframe your mindset by focusing on your spending and saving goals. This is beneficial for everyone.
With this approach, even if you decide “this is how much I need/want to spend each month,” be specific and add fun categories like clothes, travel, dates, etc. so the spender can still spend. . Next, take it a step further and identify how much you want to save each month. Of course, you both have to work within the framework of how much money each of you will receive each month, but this is a conversation and there may be some compromise and give and take, but at least you will be able to We have an open dialogue about this. your finances.
Also, if there are more expensive items, set joint goals. We then establish a timeline for when that goal will be achieved and work together to achieve it.
If you make a plan and talk about it often and openly, finances don't have to be a point of contention in your relationship. Remember that nothing is set in stone. If your life circumstances change or something isn't working, change your plans and try something new. Finances should support your life goals as a couple, not tear them apart.
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This article was written by and represents the views of our contributing advisors and not of Kiplinger's editorial staff. To check your advisor's records, SEC or together finra.
