First comes love, then commitment, then financial partnership.
Individuals who enter relationships with solid money habits have their advantages, but making love work requires maximizing dual income and combining skills to achieve common goals and dreams. is essential. Financial planning can be a source of frustration and friction when you think differently about saving and spending, or when you don’t know where to spend your money.
Being a financially capable couple has nothing to do with being wealthy. It involves managing your money and allocating it effectively to the things you value and want to do in life.It also comes from getting to know you and your partner money story and the character of money.
There is no handbook on how couples can effectively manage their money. Still, there are ways to minimize arguing and make more money together.
Here are 10 habits that will help you be a couple who are “together” when it comes to money, along with tips on how to get there.
10 money habits of highly effective couples
1. Understand shared and personal costs
This allows you to eliminate some expenses that you both are paying (and they do!), know your true shared bills, get better use of your joint account, and start spending as a team. can. Get out your spreadsheet or pad and paper and start making a list of your shared and personal expenses.
Don’t know what they are? Your joint costs are the consistent costs you pay each month. Examples of shared expenses are rent, mortgage, and utilities. Once that’s done, you can start thinking about and talking about other expenses that the two of you will share each month. groceries and other monthly subscriptions.
Then, start making a list of your personal expenses, such as gym memberships, gifts for family, and expenses you tend to spend on things you want.
2. Know your strengths and weaknesses
Let’s face it; not everyone has a relationship with all financial know-how. Instead of expecting freewheelers to be spreadsheet masters, think about how they can best contribute to your financial relationship.
For example, if one of you is naturally organized, that person may be named Chief Financial Officer. Another one of hers helps others by bringing in extra income or forgetting to enjoy the little things in life, such as the occasional dinner, so that others don’t get too down on their faces.
Consider how each of you can own a financial role that brings you joy instead of a miserable chore.
3. Understand your needs, wants, and goals
Couples who manage their income effectively balance short-term and long-term goals, allocating their paychecks to the near and far future. for example, 50/30/20 rule (50% Needs, 30% Wants, 20% Savings) allows you to effectively start planning your money instead of saving and spending sporadically.
For example, a couple with a combined annual after-tax income of $80,000 allocates $800 a month to share monthly bills and expenses (required), and $200 a month for a big anniversary trip to Australia in 2021. Start by allocating (hopefully) $300 each month to your emergency fund and retirement account (savings).
4. Learn each other’s money stories
When it comes to money, we get into a relationship with a lot of baggage. Our parents may not have taught us good values or how to handle personal finances. Maybe they weren’t good with money and weren’t role models. Your money story explains who you are financially and how you got there (and where you want to go in the future) To do.
Taking the time to learn about each other’s money stories and how their attitudes have developed over the years can help couples build intimacy and understanding. There is a fun way to learn.
Consider starting with a fun game of 20 questionsand you will be amazed at how much you can learn about each other.
5. Set monthly money dates
Most couples would rather go to the dentist than sit down and discuss their financial situation. And who can blame them? Conversations about money can be very stressful and end in fights and blame.The solution is to set monthly money date Soften the blow on difficult topics and make them more regular so that there are no shocks or surprises.
Money dates should take place once a month at an agreed time after the cooking is done, with a glass of wine or a pleasant dinner. situation) will help you get closer to difficult money stories and help you tackle more difficult topics in the future. , to keep your money flowing in the right direction, making real positive change.
6. Start automating finance
Couples who leave the burden of bills and certain shared expenses to automation can actually spend more time doing, well, fun things to do. It means you don’t have to write your own notes to send money to or report bugs to other people to pay your bills. But financial automation is more than just a convenience.
Automation can reduce what behavioral economists call “payment pain.” Combined with a lot of communication, automating household finances allows you to save and spend together or separately.
7. Understanding Money Merge Styles
Not one way to couple consolidate their financesTake the time to figure out what your money merge style is. Do you put all your income into a big pot and pay your bills, shares and personal expenses from there?
nice! Alternatively, you may want to allocate part of your money to a shared account so that you can spend part of your income on your own. However you choose to consolidate your income, it is imperative that you both feel able to access your money in a way that makes you feel financially independent and plays a healthy role in financial decision-making. .
8. Know your money personality
Think spendthrifts and savers can’t find financial happiness? Nonsense. Opposites can be attracted as long as they agree with the big picture. In fact, research shows that two savers may not be as financially compatible as one thinks.
take character of money Tests are a fun way to help figure out your spending and saving style. Let everyone do their best work so that financial planning doesn’t feel like a chore. You can also build trust between two people and understand how their financial personalities complement and conflict with each other.
9. Prepare for the unexpected
No one can predict the future (Hello 2020). That said, couples who know there’s always a rainy day on the horizon should one partner lose their job, face huge medical bills, or face a sudden change in their living circumstances. We maintain a sound emergency fund.
There are many schools of thought on how much to set aside, but a good rule of thumb is three to six months to keep the lights on, whether it’s rent or mortgage, credit card bill minimums, or car payments. This is a joint monthly fee. Automating payments to your emergency fund makes it much easier to create and grow your funds.
10. Find something to celebrate
The most financially successful couples celebrate something positive in their relationship even during the least financially favorable times. It costs nothing to tell someone how important they are to you and how you value them. It’s okay to agree to disagree, as long as you take the time to arrive at a solution that doesn’t end in sullenness or passive aggression.
Financial harmony comes from celebrating all the good things the other person brings to the relationship. If you schedule a monthly money date, end it with something fun and loving, such as a bowl of ice cream or a snuggle on the couch.
Remind each other that you are a team and that you are here to support each other.
This post originally appeared on Wealth of Geeks
