There’s a sweet feeling that comes with being engaged or married. However, the issue of money has torn most marriages apart, because couples have failed to understand that managing money as a couple is all about honesty, transparency, and respectful communication.
The only way to avoid fights and distrust as a couple is to have a common understanding of managing your money.
1. HAVE A DATE, TALK ABOUT MONEY
As a couple creates time for a heart to heart conversation, be honest about your debt and current financial status. Let your partner know how you feel about money, your spending habits, and your money goals.
It will help you understand them better and also prevent issues before they happen. Don’t be too hard with the outcome, you will learn from it.
2. BE EQUAL WITH YOUR PARTNER
As a couple you’re a team, If you have a debt, work together as a team to clear it off. No matter how experienced your partner is about managing finance, mistakes are bound to happen, it is not advisable to let your partner control all the joint finances alone.
Have a mutual understanding, know what you can and what your partner can’t afford. If something happens to one of you, the other would have an idea of your financial affairs.
3. CREATE AN EMERGENCY FUND
An emergency fund is important, it will help you pay off debt and also sort out other financial issues that may arise unexpectedly. Set aside 20% of your income for 6months to save for an emergency.
4. JOINT OR SEPARATE ACCOUNT?
First, understand that what worked for other couples might not work for you. Find out if your partner’s financial goals and spending habits are the same as yours, also discuss your partner’s records of managing money only then can you consider having a joint account.
5. OPEN A JOINT ACCOUNT
Now that you’ve figured your partner’s spending habit matches yours, you both can go ahead and create a joint account and automate funding your account monthly. This will give you the freedom to spend the remaining part of your money without your partner’s input.
6. OPEN A SEPARATE ACCOUNT
If your partner’s spending habits don’t match yours, we advise you to keep your money separate, that doesn’t mean you’re separated. Split the bills 50/50 or any way suitable, consider your partner when making decisions about money, plan, and communicate regularly.
7. PLAN ALL THE WAY
Your spouse isn’t just a roommate; you need to figure logistics and plan as a couple for shared goals as newlyweds. You need to talk about household logistics— how you will work toward your goals, who pays the rent, school fees, other household expenses, and how you will reimburse each other.
Discuss your plans, ideas, and logistics to make sure you both understand and agree on the plan and that all your bases are covered.
8. CREATE A JOINT BUDGET
Know that budgeting as a couple will help you combine both income and expenses, create a budget together then practice living on a joint budget for as long as you can, it will track your spending and refine your budget to match your spending needs.
Understand that as you grow your budget will also increase, take note of that and readjust your budget
9. BE SUPPORTIVE
If your partner is unemployed or isn’t earning, perhaps earns less than you, you could both keep separate accounts and have the main earner pay their partner an allowance. The main earner can transfer an agreed amount each week or month to their partner’s account.
Before you make this decision, make sure you both feel comfortable with the idea, you’re not doing your partner a favor if one partner is looking after the kids, or working as a carer – that’s a job too.
10. CHECK YOUR FINANCES REGULARLY
It’s important to know exactly what’s happening with your money as a couple, so discuss your finances with your partner regularly and openly. This will help you both stay involved with household finances, manage your money responsibly, and deal with any issues together.
11. SET GOALS
As a couple, you both must figure out your financial status so you both can establish long term goals (like buying a house, car, paying tuition fees, and also plan for retirement) to achieve this goal as a couple, communicating with your spouse shouldn’t be a challenge.
However priorities of personal finance are as unique as the individual themselves, so every saving strategy must consider the needs and aspirations of both partners to be successful.
12. ASK YOUR PARTNER
Ask questions to make sure that you and your partner have similar priorities, or can find a compromise somewhere in the middle,
- Are savings and investments a major priority for you, or do you prefer to spend money as it comes?
- How much of our income are we willing to spend on household logistics?
- How much money do we spend to support our external families if the need arises?
- How many children are we having?
- If we plan to have children, how much do we want to support them financially?
- Do we pay for daycare/child care?
- Should we save for retirement?
- Do we buy our own house or keep staying in a rented apartment?
Understand that managing money won’t work without communication, don’t expect your partner to know your financial status if you both don’t have healthy communication.