Lasting relationships require dedication and hard work – and plenty of financial discussions. While money might not be the most romantic topic, it is crucial for couples to understand and tolerate each other’s spending habits, investing behavior, and long term financial plans. Read on for five common mistakes couples make when it comes to managing their money and learn ways you can avoid any potential downsides.
1. Lack of communication
Most couples don’t know how to talk about money, despite the fact that it is the number one cited argument during divorce proceedings. Clearly, discussing finances is crucial in any relationship, but it’s not just about the quantity of discussions, it’s about quality. Take into account any differences in personalities and spending habits and create a plan. Be strategic rather than emotional, if at all possible, when it comes to discussions about money and conversations will go much more smoothly.
2. Merging finances too early
Don’t assume that moving in together or getting hitched means you automatically have to combine all your finances. While the majority of married couples do set up joint accounts, newlyweds shouldn’t feel pressured to jump into this arrangement right away. Ease into the process. Create a joint account for both of you to contribute to and take from, but leave personal accounts in place with enough cash to feel autonomous. The benefits of dual incomes are numerous, but it can often feel necessary to keep some aspects of your financial lives separate. Just make sure you clearly communicate this set-up to one another to minimize hurt feelings or actions happening behind someone’s back.
3. Creating drama over debt
Don’t be accusatory when it comes to debt. This is harder to do than it might seem, but it matters. It’s very possible that one couple will approach the relationship saddled with bills while the other is free and clear. Feelings of resentment can be avoided if both couples accept the debt as a shared situation. Support each other and create a plan for paying it off on a schedule that takes both partners into account.
4. Spending woes
For some couples, there is one “big spender” while the other prefers to save. While this might feel unbalanced, the fact of the matter is, you both spend money – it’s just on different things. While women tend to make purchases more frequently, men will often splurge on one large item (think: a new flat screen TV) if they find a deal too good to pass up, or they just want to reward themselves (guys also buy more tobacco and booze and women tend to spend more money on household goods). If arguments tend to revolve around regular spending habits and talking about it hasn’t solved the problem, it could be worth seeing a couple’s therapist to help better understand the other’s behavior and work through any underlying concerns. This may seem drastic, but it really can help.
5. Investing issues
When it comes to investing, men are usually more willing to take financial risks than their spouses. But fighting about how much risk to take with your investments based on how you feel about your assets doesn’t do much good. Instead, try sitting down and talking about your investment goals and time frames. You could also try a trading investing class or seminar just for fun. You two can bond over a weeklong course, and improve your investment skills.
Money makes things tricky – without a doubt – but there are effective solutions for working through the issues. Communication is key. Try to avoid the five common mistakes listed above and you and your spouse or partner will likely be in the clear.