Financial infidelity in married is nothing out of the ordinary these days. According to a survey conducted by Forbes Woman, 31% of examined admitted that they lied to their partners about finances, and another third of these adults said they had been financially deceived by their significant other. Among the couples affected by financial disloyalty, 67% said the deception led to an argument. Perhaps the most alarming fact is that 16% of them said it led to a divorce and 11% said it led to a separation.
When two people decide to join in matrimony, not much is guaranteed, but one thing is certain – they have to address their finances together. Whether you tie the knot in your early 20s or in your late 40s, you may find yourself sharing someone else’s personal loans, credit card debt or foreclosure history. Even if you and your spouse are financially stable, marriage links the two of you financially in a way that requires some thoughtful decisions. These five tips are here to help the newly married couples avoid financial problems that affect so many people down the road.
Married Couples Financial Guide:
1. Set Mutual Family Goals
In addition to love and respect, much of what couples do together comes down to money matters. It is, therefore, important that married couples set some common goals and understand what your family can realistically manage to pay for. Such goal may include planning of family vacations or even loans before borrowing. For example, there are numbers of loan calculators available on the web that you can use to see what you might spend on a house mortgage or personal loan. If you are planning a family vacation, take a look at different options. For example in Australia, services like Travel Pay offers holiday payment over five months without interest and you will be surprised to found one in your country. However, your best choice in such cases is to save towards the goal.
Mutual goal setting should also be extended to giving birth as well as education of kids. For example, you should plan to start savings toward paternity, child care and educational cost. This could help you avoid the stress most people goes through when their child got admitted into a tertiary level.
In marriage, working as a team towards a common goal will improve your communication, trust and strengthen your relationship.
2. Change is sometimes necessary for Marriage
Change is very important if you want to improve your personal finance in marriage. So, be ready to change your behaviour as most financial problems are actually behavioural and not money problems.
“If you always do what you’ve always done, you will always get what you’ve always got!”
What does this mean to the married couple?
- If you continue to only spend instead of saving, you will continue living on salary to salary.
- Continuously borrowing money to support an “extravagant life” you cannot afford, you will continue to sink in more debt.
- A habit of savings and investing wisely, you will likely continue to achieve your personal and family goals.
3. Set and Track Your Family Budget
Everyone knows that making a family budget is necessary, but that is not enough – you need to be sure that you are both staying within your spending allotment, and make sure that you adjust accordingly as your situation or income changes. One solution you may want to try is the envelope budget system; it is great for younger couples who usually have lower incomes and must be careful when it comes to spending. Another method of tracking your budget is to design a spreadsheet that tracks all of the monthly/yearly expenses. Financial discipline is the number one way to stay within your budget and it relates to everyone in the family. So be willing to learn how to prepare a family or personal budget.
4. Discuss Your Bank Accounts
With agreed family goals and budget, it may be helpful to manage the funds together. This could be achieved through a family joint account and ATM card. However, operating a joint or an individual account have their pros and cons, after you are married. A joint account may especially be valuable when one partner chooses to take on more household duties than the other, resulting in inequality in income. While maintaining some level of independence may be preferable for both spouses, it could also make it easy for one partner to hide his or her spending habits.
You should, therefore, discuss the benefits and issues of a joint account with your partner, and make sure that you are both comfortable with the decision.
We are not suggesting that all your life savings should be put in the family joint account but combining household funds together could take the relationship to another level.
If you do not have an emergency fund already, consider making one a top priority of the family. You have to have some money set aside when something unexpectedly happens, like a lost job, natural disaster or a major home repair. Strive for saving at least 6 months’ worth of your expenses in case of emergency, because building an emergency fund for your family will bring financial security in case disaster strikes.
Marriage represents a fresh and exciting turning point in our lives, and if you take a few extra steps to plan out the financial aspects of it, it can be really fun (or really hard, if you don’t!). Being prepared for any obstacles along the way is necessary, including behavioural change, saving for the future etc. A great family financial plan will surely give a plethora of benefits and secure a harmonious married life.