After love comes commitment and then financial partnership
It’s a plus if you have good money habits when you start a relationship. But to make it work, combining skills is essential.
When you don’t know where to spend or save your money, or have different attitudes towards saving and spending, financial planning can cause frustration.
It has nothing to with being wealthy. Managing your money and allocating it to the things that you want and value in life is the key. Knowing your money personality and stories is also important.
It’s not possible to write a guide on how couples can manage their finances effectively, because each couple has different goals in life. There are still ways to grow money together and keep arguments to a bare minimum.
You can become one of the couples who “have it all together” in terms of their finances by adopting these 10 habits.
Ten Money Habits of Highly Successful Couples
- Understanding You’ve Shared vs. Personal Expenses
You can eliminate some of the things that you both pay for. Get a better understanding of the actual bills you share to start spending together.
Start by putting together a spreadsheet, or a pad of paper.
You’re not sure what shared expenses are? Shared expenses are expenses you and your partner pay together every month.
Rent, mortgage and water and heating bills are examples of shared expenses. Once you’ve done that, you can begin to think about and discuss other expenses you and your partner share every month. For example, groceries and monthly subscriptions.
Make a list of all your expenses. Include the ones that you pay for separately, like gym memberships and gifts to family members. Also include how much you spend on things you enjoy.
- Knowing Your Strengths And Weaknesses
Let’s be honest; not everyone enters a relationship knowing everything about finances. Instead of expecting the free-spirited individual to be a master at spreadsheets, consider how they can contribute the most to the relationship.
If, for example, one of you has a natural tendency to be more organized, this person could be designated as the chief financial officer.
You can both help each other by either bringing in more money or by making sure the other person doesn’t get so overwhelmed with numbers that they don’t enjoy the small things like a nice dinner out.
Find out what each person can do to make their financial role a joyful experience and not a tedious chore.
- Understanding Your needs, wants, and goals
Couples who manage their incomes well juggle short-term and longer-term goals, and distribute their paychecks to the near- and far-future.
You can plan your finances more effectively by creating buckets. For example, you could use the 50/30/20 rule (50 percent on needs, 30 percent on wants and 20 percent on savings).
A couple earning $80,000 a year after taxes, for example, could start by each allocating $800 per month to shared expenses and bills (a need), $200 per month towards a big anniversary vacation in Australia in 2021(a want), and $300 each month into their retirement and emergency funds (savings).
- Listen to each other’s money stories
Money is a big part of our baggage. It’s possible that our parents didn’t teach us how to manage personal finances or good values. They may not have been good role models or had a poor understanding of money.
Your money story is a description of your financial status and where you’re headed (or what you hope to achieve in the future).
Couples can build intimacy and understanding by learning each other’s stories about money and how attitudes have changed over time. You can learn about each other’s financial stories in a fun way.
You’ll be amazed at what you can learn by playing a game of 20 fun questions.
- Create monthly money dates
Most couples prefer to go on a dental trip rather than spend the evening discussing their financial situation. Who can blame them?
Money conversations can be stressful and lead to arguments and recriminations. Set up a regular monthly money date. This will help to make the topic less stressful and more predictable.
Once a month, after dishes are finished and a glass or two of wine is consumed, a money date can be scheduled.
It is possible to make difficult money discussions easier by taking an hour and talking about your financial goals, your debts and your feelings. You can also discuss your short and long-term goals and your progress in achieving them. This will help you to tackle more challenging topics later on, to keep your money flowing the right way, and to make real positive changes.
- Automate Your Finances
Couples that automate the payment of bills and other shared expenses will have more time for fun activities.
When you automate your finances, you no longer have to make a note for yourself to transfer money manually into your joint bank account or bug your partner to pay your bills. Automating your finances offers more than convenience.
Automating our finances can reduce the pain that behavioral economists refer to as ‘paying. Automating your finances, when combined with communication and a lot of savings and spending can be done together or separately.
- Start Understanding Your Money Merge Style
Couples can merge their finances in many different ways. It’s important to take the time to determine your style of merging finances.
You can pay all of your expenses, including shared and individual bills, by putting your entire income in a large pot.
Cool! You can also allocate some of your money to a shared account, while keeping the rest for you to spend however you like.
It’s important that, however you decide to combine your incomes, you and your partner feel that you can both access your money. This will give you the feeling of financial independence as well as a positive role in financial decisions.
- Learn Your Money Personalities
Do you think a spender or a saver cannot find financial satisfaction? Nonsense. As long as both sides agree on a larger picture, they can be attracted to each other.
Research has shown that saving and spending are not always compatible.
A money personality test can be a fun and easy way to determine your saving and spending style. Allow each person to bring their superpowers and do what they are best at, so that financial planning does not feel like a burden.
This can also help you build trust and learn how to complement each other’s money personalities rather than clash.
- Prepare for the Unexpected
Nobody can predict the future. (Hello, 2020). Couples who are aware that rainy days will always come, should keep an emergency fund in case one partner loses their job, gets a large medical bill or faces a sudden change of circumstances.
There are many different opinions on how much money to set aside. A good rule of thumb would be three to six month’s worth of expenses shared by all household members, such as rent, mortgage payments, minimum credit card bills and car payments.
Automating your pay to your emergency fund makes it easier to create and grow.
- Find things to celebrate
Even when times are tough, couples who are financially successful celebrate positive aspects of their relationship. It costs nothing to tell the other person that they are important and valued.
You can agree to disagree, as long as you are willing to work on solutions that do not end in passive aggression or sulking.
The key to financial harmony is celebrating the positive aspects of the relationship, and not dwelling on what holds you back.
You can end your monthly money date with something fun, like a bowl of delicious ice cream, or cuddling on the couch.
The most important thing successful couples, whether financially or not, can do is to remind each other that they’re on the same team and are here to support one another through thick and thin.
This article was originally published on Your Money Geek and is republished here with permission.
