Today, the strength of a couple’s relationship often depends on how well they manage their finances.
Many couples experience conflict when managing their finances in a way that pleases both partners, according to financial advisors.
One may feel that the other spends too much money or does not set aside enough money for retirement.
Deciding to get married is more than merging two lives: it’s also the merging of finances. While many couples fare well, others often run into issues when it comes to money matters.
If you’re not sure where to start, here are five money tips to keep your marriage on the road to happily ever after.
#1 Be Honest About Your Spending Habits
The first rule to having a happy marriage is being honest, and that includes your spending habits and any pre-existing debt. Far too often, husband or wife is dishonest about managing money or the amount of debt they have, like student loans or credit card debt. Without a prenuptial agreement in place, that same debt might become yours after you get married. Even worse is that if you do divorce, you could still be held responsible.
If you’ve already said, “I do,” you still need to have a financial plan. If you or your spouse are paying student loans, refinancing might be an option. In most cases, a private lender can roll your loans into a new one, which has a lower interest rate and better repayment terms as well. You also need to look at your combined finances and see where you can cut corners. Together and individually, make a list of non-negotiable bills and any extras. Non-negotiables include your mortgage or rent, health insurance, and credit card debt.
You also need to consider extras or things you consider perks, including eating out, subscription services, and unused gym memberships. If your extras are costing more than the non-negotiables, you need to scale back. As important as it is to do things you enjoy, it’s more important to put the money to good use and pay off outstanding debt.
#2 Create a Budget
Of all the tips for stabilizing your finances, creating and living by a budget should hold the number one spot. After you’ve outlined all the expenses, now it’s time to create a budget both of you can live with. If you’re both working, you can open a bank account and deposit equal amounts to cover the monthly costs. If you or your spouse earn more, then you need to decide how much they can contribute without being broke at the end of the month. You should set aside enough money to do the things you enjoy, as a couple and alone.
#3 Investment Compatibility
In addition to being on the same page financially, investment strategy is one of the most important money conversations to have with your partner. That’s not to say you have to mimic your partner’s investing preferences. However, being complete opposites could be problematic. Have a serious discussion about whether you want to invest and how much.
#4 Talk about Retirement
You also need to talk about retirement to avoid the retirement planning mistakes many married couples make. If you’re currently contributing to a retirement fund, is your spouse able to match that contribution in their own fund? If you have a joint retirement fund, it’s still important to define how much each of you can contribute every month.
#5 Keeping Finances Separate
When you were dating, you obviously kept your finances separate. But now that you’re married, you need to decide whether you want to have only a joint account or keep separate accounts. What works for one couple may not work for you, and that’s okay. If you want to have your own account for your mad money and a joint account for those non-negotiable bills, that’s also okay. Ultimately, it still comes down to being honest with each other about where the money is going.
The bottom line
There’s a delicate balance between marriage and finances. Getting on the same page takes a lot of work, but it is possible. Achieving this balance requires both spouses to share the same priorities and goals when it comes to money. While there are ups and downs, if spouses are committed to working together to find solutions, they can succeed.