Money is not the key to happiness. But lack of money can harm the harmony of your partnership.
It’s no secret that relationships take work. Effort and compromise must be made by both sides to master the game of two. There are many activities you should master as a couple. Excelling in financial management is one such fun endeavour you can conquer together and grow as a couple.
1. Common money mistakes couples make
Financial stress is among the top reasons why couples get divorced. It’s such a shame considering this is usually a result of lack of knowledge and communication. Here are the most common mistakes you want to make sure you avoid:
Lack of honesty
A healthy relationship is based on trust. The same applies for money management. Financial management is one of those topics you cannot afford to skip. You need to build a healthy dynamic by establishing ground rules and developing a mutual understanding of each other’s money managing habits. Managing your finances is a great way for you to learn to compromise and work as a team.
Making a mistake is fine as long as you admit your error up front. Remember, trust takes a long time to build and a second to destroy.
Opening a joint account is a smart move for a number of reasons. It’s good to have your funds together to pay your shared financial obligations such as rent. More importantly, it’s a symbolic move that you now operate as a team. But, you are still two individuals and for your partnership to thrive, you need time and pampering as individuals as well. It’s perfectly ok to keep an individual account on the side to keep a healthy level of individuality.
Forgetting about an emergency fund
An emergency fund is your safety net, a cushion of money to fall back on. If we learned anything this year is that anything can happen and there’s safety in knowing that an unexpected expense cannot threaten to erase your bank account. Budgeting is key as you can put away money each month to this category, just like your savings.
2. Finance tips for couples
With a few simple tips, managing finances as a couple does not have to be complicated or painful at all. It can even be a precious way to grow even closer, in love.
Talk about your financial history
Everyone has baggage. There is nothing to be ashamed about. What matters is that you can speak openly about it. Sharing your fears and aspirations is just as important as you are now building a future together. Nothing can ruin your life more than a non-supporting partner, so you need to make sure that you are one the same page with the person you want to build your life with.
Develop a plan of action together
By becoming a couple, you agreed to become a team. For a team to be effective, it needs to work together. By being on the same page about your income and expenses, as well as financial obligations, you will progress more easily towards your goals.
Identify clear lines
The ugliest thing about a divorce is arguing whose is whose. The “what’s mine is yours” has no meaning if the two partners define wealth differently. There is no room for assumptions here. Make sure that you both see things in the same way.
Set aside time for review
This might not be your most enjoyable activity, but it is crucial to take the time out of your busy schedule for this conversation to prevent any future conflict. And who says it has to be boring or uncomfortable? Make it fun by going out or opening a bottle of wine.
Use budgeting software
A software will make your life easier, period. Not only will it make tracking of your spending super easy and convenient, while saving you time, but it is also a great way to start the above-mentioned conversation.
Identify ways to reduce your utility bill
One of the perks of budgeting is that by tracking your expenses, you actually get to identify areas where you can reduce your costs. The biggest example is your utility bill which most likely eats up the largest portion of your monthly expenses. Websites such as pa power switch were made to help customers shop for electricity as it ranks providers based on criteria such as affordability, plan complexity, etc. Getting a better rate can result in instant yearly savings of several hundreds of dollars you can spend on your date nights.
Money is among the most common stressors in relationships, but this does not have to be the case. All it takes is a little bit of strategy and effort. Being on the same page about your finances won’t just improve your financial well-being, it will also strengthen your relationship.