Monday, February 12, 2018
The Top Money Mistakes Couples Make
Welcome to Couples Week here at Budget Boss. In honor of Valentine’s Day on Wednesday I have decided to dedicate a whole week to the challenges couples face with money. When you are single, things are easy. You either have money, or you don’t, and the root of all problems is squarely pointed at one person, you. When in a relationship it can get a bit more complicated. Therefore, the financial planner role is so important for couples. They have an objective eye to point out gaps without the emotional attachment. Today I am going to delve into the Top Money Mistakes Couples Make. Often, we get blinded by our love and don’t see that what we are doing might be hurting our relationship. Let us remember that over 50% of marriages end in divorce with money being the main cause. Fixing these issues might make you much happier and a lot richer.
Not opening up about your money past
We all have money mistakes from the past. You may have missed a credit card payment that one time. You might have bounced a cheque when you were 21. You might even have 5 items in collections. You must tell your partner about your money past. The reason is simple. If you plan on being with someone for a long time, they will find out about it anyway. Would you rather they find out from you on your own time or when you both are applying for a mortgage? If you truly love your partner you will understand their mistakes and encourage them to fix them. This is better for them and for both of you as a couple. Hiding your money past is neglecting your future together as a couple. You should also discuss your relationship with money while growing up. Everyone’s childhood was different, and it will often shape how we feel about money moving forward. As a couple, it is important to understand where each person is coming from.
Not communicating about spending and budgets
It is important that both members of a couple are on the same page when it comes to spending. You can’t have one person being Amazon’s best friend while the other is eating a can of beans for dinner. Setting a household budget should be an open exchange of ideas and feelings. It doesn’t have to be rigid or stiff, it can be fun and exciting. You should be able to openly state what you make and what you spend money on. Eventually, the other person will find out. You can’t sneak in the back door with shopping bags forever. Not being open about spending will only lead to resentment which could lead to more bad decisions. Everyone has things that they like to spend money on, so get it out in the open. This will allow you both to pay the bills, save for the future and enjoy your money in the present.
Not setting common financial goals
As a couple, it is paramount to set financial goals. Whether it be to make rent every month or to save for retirement, these goals should be done together. It creates a team environment that will sustain you through the tougher times. It also helps you be accountable to someone other than yourself. Just like sitting down and talking budgets with your partner, you should also discuss your future financial goals. You can even have a time every month where you do the two. Call it your budget/goal date where you both sit down every month and discuss money. You can track the progress together and discuss the roadblocks you both face. Doing this will allow you both to build a stronger, more stable relationship and it will become extremely important when children are thrown into the mix.
Not being able to spend your own money
A huge point of resentment in relationships when one or both members cannot spend their own money. I will first start off by saying this all gets thrown out the window when debt is being paid off. When one or both of you have debt, it is a burden on the relationship and spending your money freely becomes secondary. Focus on the debt, then get things for yourself. If there is not a pressing debt to be paid off, each person should be able to spend the money they make when they wish. No one likes being on a prison style allowance and we all love to enjoy the fruits of our labors. This is why the common budget and common goals are so important. If you both are on the same page with the necessities and the future goals, does it really matter what the other person spends their money on? You should be able to justify every purchase, but for many purchases, you shouldn’t have to. It could get really close to a father-daughter or mother-son relationship if this behavior is not addressed.
Not talking about the big stuff
You wouldn’t believe how many couples I have spoken with that haven’t addressed the issue if one of them gets sick or even dies. We often complain about the small things like the purchase of a pair of shoes and don’t complain about our spouse not having life insurance. The big stuff is big for a reason. It affects your lives greatly. If you truly love your partner you will take the steps to address all the big things in life. This includes having a will, power of attorney, contingency plan and of course insurance. Another big thing that should be talked about is inheritances. Some people wish to blend their inheritance money in with the family finances, other wish to keep it segregated. I have met couples that have each kept their inheritance separate for their whole life. There is nothing wrong with that and it should be respected. Get on the same page if either of you expects an inheritance because large sums of money can rip a couple apart. It can also unite a couple like never before. The big things will always hang over your head if not addressed openly and frankly.
Communication is the key to any relationship and I know from experience that keeping things in the dark only makes it worse. There will always be that elephant in the room. As a couple, it is important to discuss the daily issues but also look towards the bigger goals. We often think of money as a divider when really it can be the thing that pulls you both closer together. You better believe it will all come out eventually, so get your money issues out there from the get-go. If you truly love each other it will be the best thing for you.
Thanks for tuning in today as we begin Couples Week at Budget Boss. Don’t forget to tune in tomorrow as I discuss several methods for couples to blend their finances. If you would like help with your relationship money issues please do not hesitate to contact me at firstname.lastname@example.org. Have a great day Bosses!
“Be honest, brutally honest. That is what’s going to maintain relationships.” – Lauryn Hill
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