Couples Behind Closed Doors: Finance Edition
Welcome to the first edition of Couples Behind Closed Doors, where we’ll reveal how finances can affect couples and discuss best practices for keeping your relationship harmonious.
It’s no secret that managing money can cause issues between couples, whether they’re living together or married. Oftentimes, one is a spender while the other is a saver, making the money topic an explosive one to discuss.
Nevertheless, open communication is crucial. A lack of communication about finances can lead to challenging money issues, and keeping financial secrets could ruin a relationship altogether.
The way people think about money often stems from the values their parents instilled in them. It’s up to couples to take the time to understand each other’s ideas about finances. To see a complete view of your partner’s financial viewpoint, ask open-ended questions, like:
To see a complete view of your partner’s financial viewpoint, ask open-ended questions, like:
- How did your parents handle money?
- Do friends and family ask you for loans? Do you ask family and friends for money?
- How did you begin your independent financial life? When did you start paying your own bills? Did you ever run into trouble with debt?
- How do you define “needs” versus “wants”?
- Do you use cash, credit cards, or checks? How often do you sit down and review your circumstances against your financial goals?
- How do spending and saving define you as a person….how do you want to be seen by your friends and family?
Establishing mutual acceptance and the ability to work as a team will help you resolve disagreements over money. Let’s now look at some typical financial problems couples face and dive into how to address them.
Your significant other purchased a large-screen HDTV without consulting you first. This makes you feel betrayed and even disappointed, if you wanted to spend that money on something else.
How to resolve:
Set up some one-on-one time with your partner. When you talk (calmly) about the TV, discuss it like a business decision. Express that it’s important that the two of you make these decisions together and suggest a new way to manage splurges. You want to work out a compromise for approaching big purchases and set a budget so that you won’t go into debt when making them.
You and your partner both have a lot of credit card debt. One of you wants to open a new account and consolidate the amount on one card at a lower interest rate, but the other would rather set up a strict budget and make monthly payments on the cards.
How to resolve:
Regardless of how the debt occurred, you need to deal with it. Decide how to pay it off together. Find a way to pay down the debts as quickly as possible such as implementing a cash flow plan, and without any late payments. And recognize that a lower APR card or debt-consolidation is just a treatment of the symptoms of a problem….you two still need to address the root-cause.
The key to being in financial harmony as a couple is being aware of where you are today (an honest assessment)where you need to go. Once you’re on the same page with goals, work together to develop a money strategy that incorporates both of your individual ideals.
If you’d like to speak to a financial expert about improving the way you and your partner deal with your finances, or addressing the root-cause of an issue, request a free consultation with a representative today! We can help you remove the emotion from the discussion, create a solid plan, and most importantly, implement the plan!
The article is reprinted by permission from LevantoFiinancial