Marriage and Finance: Planning Your New Financial Journey Together
There’s a reason why the saying “We’ll survive on love alone” is cliche, and quite honestly, cringe-worthy to hear.
While you don’t have to believe that money makes the world go ‘round, you have to admit that finances are an integral part of any long-term relationship.
In fact, study shows that debt is actually preventing relationships from getting started. What more could it do when you two are already married?
Building a life together means you’ll be pooling your resources, so follow this guide on financial planning to start on the right foot.
How money affects relationships
According to the American Psychological Association, around 62 percent of Americans experience stress because of money in 2017.
This stress is amplified in committed relationships and is often one of the most common reasons why they fail.
And it’s not just about not having enough money. Sometimes it’s not knowing what money is being spent on.
One poll found that 6 percent of those in relationships have secret financial accounts or credit cards that they hide from their partners. Lack of communication, distrust, and secrets are three steps toward financial and marital ruin.
When accounting for one becomes accounting for two
Getting into the habit of keeping a budget isn’t easy.
For one, you have to hold yourself accountable for your spending and constantly exercise self-control. Managing money becomes even more difficult when you have to do the accounting for two, without becoming too lax but also without becoming too strict.
The best way you can go about this is through honest and realistic conversation.
Tying the knot for your financial plan
Saying you should talk about money matters honestly with your partner is easier said than done, but is a necessary conversation that must be had.
One study found that couples who talk about finances are happier and more satisfied with their relationships than those who talk about money less.
Here are some steps for you to follow:
1. Start the conversation
If you are floundering with broaching the topic, you can pick from these starting points:
- Talk about your assets (and debts)
First, you need to put all your cards on the table. This means coming clean about everything you own and everything you owe. Although it’s tempting to keep debt a secret, it acts like a tooth cavity if ignored—it just gets worse over time.
- Defeat miscommunication before it starts
Part of the reason for laying out all your assets and debts is to prevent miscommunication. Hiding assets or debts at the start of a marriage will often lead to feelings of distrust or betrayal when they are eventually revealed.
- Be honest, patient, and understanding
Just as you present your own financial status, you should be ready to accept the status of your partner. Both parties need to be honest and patient with each other and work together with understanding to address any financial concerns that you face as a couple.
2. Set your goals
Now that you know where you both are at financially, you can begin to set goals.
Do you want to live in a large house with five children? Or would you rather live alone? Is being able to go on vacation often important to you? Or is being able to retire early a dream you’ve had? How much savings should you two have?
Different goals will entail different lifestyle choices, sacrifices, and compromises. Before you start creating a budget, you need to be on the same page with your partner about your wants, needs, and goals.
3. Find a budgeting system that works for both of you
Once you have your goals sorted out, it’s time to create a system that works for you.
Generally, there are two types that you can follow: a physical budgeting system and a digital budgeting system. It could even be a mix of the two.
Whichever you choose, it should be a system you can both commit to, and one that works alongside your goals and your lifestyles. Anything that you find too tedious or confusing will be difficult to stick to.
- Physical budgeting system (printables, envelope system, etc)
One of the benefits of using a physical budget system is that it becomes tangible.
Since you’ll be sticking to cash, you’re less likely to overspend, and you won’t be surprised with untracked expenses or sneaky fees.
One the other hand, it can be difficult to implement at first, and you’ll need to get used to making frequent trips to your bank or an ATM. In addition, you’ll miss out on potential credit card deals or crash back systems.
- Digital budgeting system (apps, spreadsheets)
If you’re tech savvy, a digital budgeting system might be easier for you.
Aside from having your apps do most of the calculating and financial heavy lifting, you’ll be able to budget on the go. You’ll also be able to take advantage of credit card deals.
However, it’s also easy to overspend, and you’ll need a PC or smartphone to run your system.
4. Make financial decisions together
Finally, one of the most important things you have to remember while planning out your financial journey is that you need to make decisions together as a couple.
Even if one of you may have stronger knowledge when it comes to money, it’s crucial that both of you are contributing and both of you are running the show together. Remember, just as you are a team in your marriage, you are also a team in managing your finances.
Take the plunge towards financial security
One of the common traits of a successful marriage is good communication. However, one of the things couples often fail to talk about honestly, and realistically is money.
But this doesn’t have to be the case with your marriage. Remember that you and your partner are in this together. So follow these steps to get a leg up on living a happy and financially secure life.
Want to have a happier, healthier marriage?
If you feel disconnected or frustrated about the state of your marriage but want to avoid separation and/or divorce, the marriage.com course meant for married couples is an excellent resource to help you overcome the most challenging aspects of being married.