When it comes to the topic of personal finances, not every married couple has the same attitude to it. Money may be one of the most contentious categories in a marriage. One of you can spend too much cash while the other one is a saver. The real challenge is to find the golden mean.
Is it better to separate your finances? Should you combine them instead? In this article, we are going to share with you some of the secrets of handling money in a relationship and how married couples should split finances.
Personal finance is what many couples often argue about.Anyway, when an emergency occurs you can find what apps let you borrow money instantly, but is that an acceptable decision for both? Typically, one of you is a saver and the second is a spender. If one partner is a risk-taker while the other is more conservative, you may need a helping hand with your couple’s finance. While every person can be sure that their way is the right way, here is what you can do to learn how to manage money as a couple.
According to the 2021 Fidelity Investments Couples & Money Study, one of the key findings is the importance of having communication between partners about financial matters. About 44% of married couples state they argue about money at least occasionally, one in five couples define money as their greatest relationship challenge.
It is necessary to admit that a whopping 51% of partners disagree on how much savings is necessary to reach a comfortable retirement, while 24% of respondents say they are often frustrated at their partner’s financial habits but let it go for the sake of keeping the peace. Therefore, conversations about financial matters and communication can help you prevent those arguments and create a suitable system for handling your family finances.
How Do Married Couples Handle Finances: Valuable Lessons
Keep Numerous Accounts
Even though you are a family, you should have some space for each of you. It’s great to provide individual independence to each other in a relationship and have some money you can either save or spend. If you have separate accounts you will be able to get some space for your own needs and wants while also having joint savings and checking accounts for household costs, as well as for long-term targets like children’s education or retirement.
Another thing is to have your own credit record. If you have separate accounts and decide to borrow some funds for covering urgent needs, it may be difficult to take out cash independently if you only have joint accounts.
Both Opinions Are Valid
You should also agree that it’s normal to have different attitudes to money matters in a relationship. Both of you may have your own viewpoints but they both are valid and have a place to be. There are many couples with money problems just because they can’t respect each other’s feelings about personal finances.
Find common ground by determining the significant financial aims you can agree on: taking a vacation, financing your retirement, etc. Leave a small amount of your monthly income for fun purchases and savings so that both of you feel free and appreciated.
“We introduced a tradition with my husband when we got married to have a conversation about our family finances on the first day of each month. It was the day when we developed a spending plan that we have created on a shared Google spreadsheet,” says Grant E. Donnelly, an assistant professor of marketing and logistics at Ohio State University’s Fisher College of Business. “During this meeting, we assessed our spending and adjusted for the next month. Also, we added a personal spending account for each of us to our annual plan so that we could have a bit of privacy.”
More than that, it’s important to have a system for paying your monthly bills. We’ve talked about how married couples should split finances, and now it’s time to think about the bills. Some families have a joint account to which they both contribute and use it for paying down their bills, while others divide the bills so that each person has a share to pay.
A great tip here is not just to divide the bills in half if you don’t want to have a joint account for this purpose. This division should be equitable. In other words, you want to divide the bills and shared costs proportionately to the monthly income each partner gets.
Invest Together
Do both of you have a retirement savings plan at your work? If so, you should also consider making investments together as a team. If not, don’t forget to set aside funds for a comfortable retirement. You may discuss your investment options and plans. For instance, you may choose 50% US stocks, 15% international stocks, and 35% bonds. Select the best-performing fund from each strategy you opt for.
The Bottom Line
Marriage is not only about having a mutual household or raising children together. It’s important to have mutual cooperation and compromise on various topics including personal finance. Talk about things that you have in your mind, discuss financial issues together, and plan your retirement, vacation, and household budget for each month. These valuable lessons will help you handle finances in your marriage and manage your money as a couple.
Remember that communication is the key to success here. There is no one-size-fits-all answer to whether you need to separate your accounts or join them. Find the most suitable way for your couple to manage finances and avoid mistakes.
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