Nothing will drive a wedge between you and your spouse as quickly as money troubles. Even when times are good, fundamental differences in the way you handle your money and your financial values can lead to resentment, strife, and even the eventual end of the marriage. If one partner so much as perceives that the other is â€œbad with moneyâ€ â€” whether or not he or she really is â€” that perception makes the couple 45 percent more likely to divorce.
It doesnâ€™t help that many young people donâ€™t even know how to manage their own money when they get married, much less how to run a household budget. Itâ€™s important that you talk to one another about your financial goals, values, and needs, so you can develop a joint plan for your finances. Living a joint lifestyle, using a joint account, and divvying up financial chores according to aptitude, rather than tradition, are all important parts of building a healthy financial life together.
1) Come Up With a Joint Financial Plan
When many couples first get married, theyâ€™ll continue to live separate financial lives while attempting to live joint lifestyles. That doesnâ€™t work out. Not only can it lead to one member of the marriage living to a higher standard than the other, but it makes it hard for the two of you to work together toward your joint goals.
It can take some time to merge your finances, but the first step is deciding what you both want for your financial future. You probably want to buy a house, have children, travel, or retire. Maybe one or both of you wants to buy a boat or a vacation home. These are goals you should work together toward. Sit down and mutually agree on a plan that will help you get there.
2) Make Room for Individual Spending in Your Plan
While itâ€™s important to have a joint account (more on that below), you should each also have your own individual accounts. These accounts allow you to remain independent, in case something should happen, or just so you donâ€™t end up having to ask your partnerâ€™s permission every time you want to buy something small for yourself. Again, decide together how much of each of your own paychecks youâ€™ll be allowed to use for discretionary personal spending. If only one of you is working or one of you makes a lot more than the other, then the one with more money may volunteer to contribute to the otherâ€™s personal account.
3) Designate Financial Tasks Based on Ability Rather Than Tradition
Among heterosexual couples, itâ€™s common to assign financial chores based on traditional gender roles than on which partner is actually the best at handling money. While you should ultimately make investment decisions and other major financial choices together, one of you is probably better than the other at making tasks like drawing up and following a budget, developing a long-term investment strategy, comparison shopping, haggling over car loan terms, or other individual financial chores. It might not be who youâ€™ve been taught to believe it is.
4) Use a Joint Account
Putting money for your expenses and future plans into joint accounts keeps you accountable to one another and helps foster trust. Work together to create your household budget each month, and use the money from the joint account to pay joint expenses like utility bills, childcare costs, and medical bills. Using a joint account forces you to be a financial team.
5) Live a Joint Lifestyle
If youâ€™re both living different lifestyles, either because one of you has different financial values or because you have different incomes, youâ€™re going to have problems. You need to make sure youâ€™re both enjoying the same standard of living; otherwise one of you will have or want things the other canâ€™t afford, and resentment will grow. Unless you both make the same amount of money, donâ€™t contribute 50/50 to your joint account. The person who makes more needs to contribute more; if you make 20 percent more than your partner, you need to contribute 20 percent more to your joint budget. One or both of you may need to adjust your lifestyles in order to come down, or up, to a level that works for you.
When you get married, you need to merge your finances with those of the other person, and that means coming to a mutual agreement on a household budget that makes you both happy. It can take a lot of time and talk to work out financial differences in a marriage, but itâ€™s worth it, because money problems are one of the most common causes of marital strife and divorce.