Research has shown that the very fundamental issues of augment and fight between couples is primarily about money. This has no doubt also accounted for high rate of divorce between two people who loved themselves, were fond of each other and vowed to live together forever till death do them part.
There have been postulations that couples need to talk about money and then their challenges will be resolved. In my opinion, this is not quit the solution as talks alone will not solve this ugly situation about money in marriage. In most cases, it will not do the magic. In a 2004 research by SmartMoney Magazine and smartmoney.com which are both publications of Dow Jones and Hearst, it was discovered that much more than 70% of couples talk about money on a weekly basis. And so if they are doing the talking, what then would have still led to more problems?
The following are mistakes new couples need to understand and the old couples need to adjust in order to get it right in their financial decisions.
1. Emotionalizing their Financial Talk: The number one reason talking about money by couples is not doing the magic is that they put in all their emotion into money discussions instead of talking about strategies in solving money problems. When couples talk about money with emotions, they tend to in most cases make mistakes. When you discuss about money in your home, what you need to do is to be objective, plain and place yourself like your professional financial adviser. This way you see things differently, Instead of making decisions based on your emotional feelings and immediate gratification and satisfaction, you need to see things from your partner’s opinion and weigh it side by side with yours. Look at the implication of your decisions and thoughts as well as feeling in the long run.
2. Approach Money in the home as if you were running a business: The truth is that you will certainly make lots of mistakes when you look into your family finance with emotions. However, approaching it with a business model will make you see it objectively in terms of decisions. See your spouse as a “business partner” and look beyond the immediate and concentrate on the long term resultant effect instead of the present.
You will certainly have to look at your life a year, two years, and five years from now. Never be angry but advise when you are in a financial planning meeting with your partner, with conviction. One way to sort this out is to list your partners opinion and list yours in a paper and then begin to discuss it plainly one after the other till you have an agreement on various issues you both raised, For example, if your husband says you people will buy a used car instead of a brand new car, live in a smaller house for a period of time in order to save and raise an expected amount of money in the next two years, then it is important you look deeper at the long term effect rather than what gain you will enjoy right now and suffer later. So detach your emotion from financial decisions.
3. Merging or Personal account: This is one big area that has been of contention. The challenge here is argument about merging everything you both earn into one joint account or not. While some may approach this with a decision to merge or have a joint account for the home upkeep and home expenses alone, and then have their individual accounts differently, others would want a total and holistic approach of having a single joint account for everything.
This is a critical area that most newly-weds face as a challenge in terms of handling their family finance. The wrong way many new and old couples are defining this is to look at it that united we stand and divided we bank instead of seeing it with the approach that both of you are one and so what is yours is what is mine.
SmartMoney magazine's survey found that the majority of couples (64%) put all of their money in joint accounts, while 14% kept everything in separate accounts, and 18% had both. According to Ginita Wall, CFP and co-founder of the Women's Institute for Financial Education , "Married couples should try different ways of handling the money to see what works for them"
Couples should not be secretive but declare what they have, This way, it is easier for trust to be entrenched at home naturally and it will also affect your children in their financial future.
Even if you are deciding to have a joint account for only household expenses and then have earning accounts differently, it will also be ideal for you to let your partner know what you earn and make him or her be a part of your financial spending and dealing.
4. Autonomy Money: While it may be your choice to have a joint account for certain things, it is also important that you set up and build autonomy money in the home. This means in your financial planning, you and your partner need to land in the middle in terms of financial planning decisions, Have an autonomy in your money while your hubby will also have his/her autonomy money, but decide to deal and handle all other financial issue in the home as a couple with the mind that it is “our money”. This is an art you need to learn and talk about with your partner if you do not already know it. It will take time for you to learn this so do not be discouraged when thoughts of self comes in-between you and home money.
5. Remove the spirit of Financial Big Brother: As you live together, your financial success will generally start getting shape bit by bit with your decisions. You either become financially successful or a financial failure and know that it is all yours. Even if your spouse is coming into the marriage with loads of debt, do not follow him/her with the big brother is watching your mindset. Discuss everything freely without blame and see how it can be worked out so long as you have decided to marry. But if you are coming to the marriage together with clean bill out from debt, it will also help.
In all situations, never take to monitoring and watching your spouse’s financial shoulder as this will always bring fight in the home. Just know that mortgages and kids will come into play soonest. You also need to help and step in to deal with the debt issue with your partner as you are married to him/her as one.
6. Right Way to spend: This is one area of contentions in the home. Your husband may complain at all time about your spending habit on some items not even needed. Issues ranging from accusations that you are a spender while she or he is the saver may also come up. It is important you know this fact now. Truth is that both of you should know immediately that you are all spenders, though in different ways. Therefore both of you need to sit down and budget in all things and put your spending in check.
Your husband might be complaining about your spending on other things and one day he could just walk into the house with a new 80-Inch TV as a surprise. This I know will put you off and trigger fights as you may not be impressed and might be disappointed if both of you are trying to have a frugal living.
In the fight that will ensue in most scenarios at home, one will always call the other a spender while the other is labeled as a saver. Surprisingly, according to research, men and women spend the same, but differently.
For example, women spend more on grocery, family clothing and others while men spend on TV, Digital subscriptions, cars and computers. And if you add up all, you will find out it is the same. So do not blame your spouse, instead, sit down with your partner and both of you should agree and know that you are on a very tight budget with a goal. Agree on what to use for home, daily and weekly as well as how to spend on big things.
7. Let us plan for emergency: This is one area that couples keep making mistakes. It is also an area many people who want to be financially free keep making mistakes too. Just know that no one is immune to life crisis ranging from loss of jobs, illness, government changes in policies etc. Anything could throw you off your track and you would be doomed if you do not have an emergency account to fall back to, It is therefore important that both of you have an emergency account that you save into in a discipline form every week and month. Never have to believe that everything is fine and think that you do not need to worry about money, even in times of financial abundance.
When you do not save for tomorrow’s emergency, you will always run into panic when there is an unexpected emergency and in most cases, you will make wrong decisions
The solution to this is to make sure you know how to create and set up an emergency fund. You need to plan an emergency fund with your spouse.
8. Invest Wisely with your spouse: You will need to agree with your spouse about investing. Take the risk together and never see the other person as a risk taker while you are a lesser risk taker. You need to take the right risk at the right time and have a goal that both of you can attain financially. Take risk and save massively for things like retirement, buying of home, saving for your other business projects.
In making a choice investment, you must always sit down together to discuss it freely and know where it is leading both of you to. If it is not worth it, do not start it. It is also important that you seek the services of a financial planner and adviser and have a money management mentor that you consult from time to time.
Related article: 5 warning signs you are financially unstable
9. Never keep Financial Secrets away from your spouse: Some couples have had their marriage ruined due to financial secrets. They have the notion that what their spouse does not know will never hurt him/her. Unfortunately, every little to big financial secrets can ruin your marriage. Having a strong communication about everything including finance in your marriage will help strengthen the union. Never keep any secret account or any secret financial dealings.
Study shows that 36% of men and 40% of women confess that they had at one time or another lied to their spouse about the price of something they bought. You need to be open with your financial discussions and status once you have decided you are living together for better and till death do you part. This way, your spouse will even be open in other areas of your marriage life and you will have a more blissful relationship.
Conclusion: If you want to have a strong and successful family 10 years from now, it is important that you both sit down and take common financial goals that will not only bring success with your financial life, but also bonding in your marriage as well as that of your future children. After all, the essence of your coming together is to live happily.