“Stop in the name of love, before you break my heart.” We know The Supremes weren’t alluding to the pitfalls couples face when they grapple over money issues. But our experiences tell us that money plus love can lead into minefields.
So, let’s recognized the obvious. Financial matters are an important part of any couple’s relationship. Face them head on.
For some couples, this will be second nature. For others, it’s a challenge, but we’re here to help.
If you take the time to get on the same page, you can solidify your finances and strengthen your relationship. Working towards the same goals is critical. It’s time well spent.
6 money mistakes you and your spouse can avoid
1. Set goals. He’s a spender, she’s a saver. Or, he has an always-expanding list of toys he would like to add to his collection, and she spends most of her time thinking about growing the family’s emergency fund and how she can max out their 401k contributions. Does that sound familiar?
It’s too late to have “the talk” after you have put a big purchase on your credit card. So, sit down and have a money date. Talk about your goals and write them down. Without goals, you won’t know where you are headed.
Share your feelings and (this is important) actively listen to the other’s viewpoint. Compromise may be needed but agreeing on common goals will allow you to move forward in a unified fashion. When you have completed this task, I am confident you’ll feel an enormous sense of satisfaction.
2. All for one and one for all. Marriage is about unity, but our interests won’t always be perfectly aligned. The same can be said about handling our finances.
A joint checking account and joint credit card are perfect for joint expenses, but separate accounts for separate purchase can be a good idea too. When you set your goals, establish agreements regarding your separate spending patterns.
3. Money secrets are a no-no. It’s OK not to disclose the birthday present you just bought for your spouse. It’s not OK to keep other money secrets hidden from your spouse or partner.
Major secrets may be a symptom of bigger problems that can threaten the stability of your relationship. Don’t destroy trust that can take years to rebuild.
4. Who handles the monthly bills? It’s a good idea to use autopay. But it's not a one-time set and forget it situation. You don’t want to get caught flat-footed with an overdue bill or late charges that may slip through the cracks and ding your credit report.
Therefore, who takes care of the bills? It may make sense for one person to be in charge so there’s no confusion, and regular payments aren’t missed.
But checking in monthly or bi-monthly is a good way to keep both individuals on the same page. Check-ins also allow you to make any adjustments, as a couple, to your goals.
5. What comes first, the chicken or the egg? It’s the age old question. Here's another one. Should we go in the direction of retirement savings or college savings?
Having children means putting your kids before yourself more times than you’ll ever be able to count. But when it comes to saving for retirement or college for your kids, put yourself at the front of the line.
Pensions are disappearing and Social Security isn’t enough. You must consider your retirement needs first. There are exceptions, and we can look at ways to fund both goals. But do your best to maximize retirement savings. At the minimum, capture the full amount of your company’s match.
Keep this in mind: If you don’t fund your retirement, who will?
6. Stash away cash for an emergency. Did you know that just 39% of Americans have $1,000 to handle an emergency? The rest would have to use a credit card or borrow to cover an unexpected need. I know you have ample reserves, but sadly, that’s not the case for all Americans.
If you received a stimulus check in December and you don’t have an emergency fund, please save it!