Family

For Family Finances, Collaboration is Key

family-eating-at-the-table-619142_640Managing finances is considered to be one of the greatest stressors to any relationship. In fact, many publications cite financial issues as the biggest cause of stress in marriage. While the debate over whether or not money is the problem or a symptom of other underlying issues in a relationship is yet to be fully resolved, there’s no denying that when not dealt with properly, conflicts regarding money can be a major source of contention.

So how do you avoid letting personal finances become a major pitfall to your marriage? The answer lies in collaboration.

Why Collaboration?

A collaborative approach to family finances seems like a simple suggestion, yet far too many couples fail to work together to manage their finances. Many couples don’t hold any type of communication regarding finances. When this happens, miscommunications often arise, goals go unmet, and stress and arguments are the natural results.

Just imagine if a similar situation were to happen with a manufacturing company. If management and employees fail to communicate, knowledge is lost, resulting in inferior results. Mixups and mistakes become more frequent, making it impossible for the company to achieve its goals. Naturally, this would result in disaster and the eventual collapse of the company. Because of this, many modern companies seek to learn more about knowledge management systems and online collaborative tools for manufacturing companies that will allow them to maintain constant connectivity and achieve success through collaborative efforts.

While you and your spouse probably don’t need management software to communicate regarding finances, there’s no denying that communication and collaboration are key to your success. Much like how a manufacturing company would fail without collaboration, so too will your financial situation and relationship suffer if you don’t collaborate effectively.

How to Collaborate?

So what steps are crucial to effective financial collaboration? For starters, consistent communication regarding finances is key. Many couples find it useful to hold monthly meetings where monthly budget items are discussed, including how money was spent the previous month and the progress of any financial milestones (such as saving for a down payment on a new home).

If you don’t already have a family budget in place, use your first financial discussion to set one! However, this meeting completely depends on collaboration from both parties in order to be successful. After all, you and your spouse may come from different financial backgrounds—one of you may have grown up in a family where finances were always tight and every dollar mattered, while the other grew up in a home where money was never a concern. You each have different experiences and desires that you bring to a table, and it is vital that you discuss these and other concerns openly (and calmly) when determining how to set the family budget. Budgeting should never turn into a power struggle over who has more control over the finances. All too often, confrontations of that type will result in one person sabotaging the budget.

In addition to establishing a basic budget, your collaborative efforts should include the establishment of both short and long-term financial goals. Do you want to save for a fun vacation? Or would you rather put aside your extra money for investments? Examine areas where you’re doing well and where you need to improve in order to make these goals a reality. Quite often, you’ll find that you need to reach compromises with your partner to establish a reasonable budget and to reach your goals.

Of course, these meetings aren’t the only time when you need to communicate. The employees of the aforementioned manufacturing company aren’t only going to communicate and collaborate during formal meetings—and neither should your financial conversations be limited to a monthly talk. Communicate regularly regarding finances—especially when unexpected financial events occur—to ensure that you both are on the same page.

Conclusion

The greater effort you put into your collaborative efforts, the easier it will be to prevent finances from becoming a source of contention in your relationship. By communicating regularly and working together to establish goals, you’ll achieve financial (and marital) success.

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James

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