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His & Hers Money: A Healthy Attitude to Joint Finances!
by Eve Pearce
Marriage marks the start of sharing your lives together and one significant part of your lives – like it or not – is money. Planning a wedding together could well be the first thing you have funded together as a couple and may be an eye opener in terms of each other's approach to finances. According to the The New York Times, there is a direct correlation between arguments over finances and divorce rates: “couples who reported disagreeing about finance once a week were over 30 percent more likely to get divorced”. With fights over your financial affairs causing such strain on a marriage, you're likely to want to get your money management as a couple off to a good start to avoid unnecessary squabbles. Whatever your financial circumstances, it is important that you agree on how you will handle your money and with some frank discussions and careful planning you'll be fostering a healthy attitude towards your joint finances and hopefully avoiding quarrels.
Communication is Key
If there is one thing that is fundamental to a healthy approach to your marital money, it is talking about it. Some couples, knowing that they have differing views on how to spend or save their cash, bury their heads in the sand and avoid discussing it altogether. This is a mistake as it will likely to lead to bigger arguments down the line. Start by sitting down together and looking at your financial situation as a couple. What are all of your incomings and outgoings? Make a list or a spreadsheet – whatever works for you – the important thing is being transparent and honest with each other. Once you have a clear picture of how things stand, you can begin planning your financial future. However, don't let the financial chats end there, regular communication about your money is crucial to avoiding arguments.
Joint, Separate, or Joint-Separate?
There are many different approaches that can be taken for managing your finances as a couple. You may decide to pool all your resources; keep your money predominantly separate; or you may decide to have a joint account for joint expenses (such as household items) and a separate account each for your own personal spending. It doesn't matter which approach you take; what matters is that you find what is right for you both as a couple and which lends itself to your feeling of partnership but also trust in each other's financial independence. If you are unsure which style will best suit you, Daily Finance has advice on joining your money.
Set Joint Priorities and Goals
Regardless of how you decide to make your money management work on a daily basis, it is important to set joint goals and agree on priorities. Whether it be saving for a kitchen refurbishment, a vacation, or a new house; make sure you are both in agreement over what you are working towards financially in the medium to long term. Equally, when it comes to short term spending, make sure you discuss what should be a priority. If one of you thinks that enjoying yourselves by going out to eat on a regular basis is a priority, but the other feels that such expenses should be limited with the intention of saving for a big holiday, then you might have a tricky situation on your hands. However, do not lose heart when you do disagree on your finances, after all it is highly unlikely that you will always agree on everything. The crucial thing is that you discuss it calmly and try to find a compromise. In the example given, a good compromise might be found by estimating how much the holiday is likely to cost and then figuring out how much money might be left over after the usual monthly expenses and saving for the holiday for meals out. If setting financial goals as a couple is new to you, then Fiscal Fizzle offers some excellent tips.
Help Each Other Out
There is often one party in a marriage who earns significantly less than the other, sometimes this stays the same throughout the marriage and sometimes the situation switches. Perhaps you decide that one of you will become a stay at home parent, or perhaps one of you embarks on further study. It is very rare that a couple will earn the exact same amount of money so it is important that you discuss how you will address the imbalance in earnings. As a marriage is a partnership then you should feel comfortable helping each other out and maintain your individual independence regardless of which side you fall on in terms of who earns more. A car for example, is often crucial to a feeling of independence, so if for example, your wife decides to be a stay at home mum you might like to take on the cost of insuring and running her vehicle. Similarly, if you are both saving for a family car and you husband is unable to contribute to the savings temporarily, perhaps you could add slightly more than your share for a couple of months. No matter what the situation, remembering that you took a vow of “for richer, for poorer” and creating an open, honest and supportive financial alliance will provide excellent foundations for a solid future together!