"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 own experience tells us that money plus love can lead into minefields we’d rather avoid. 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-- and it’s time well spent.
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 not the absorption of one’s self into the collective whole. 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 interests are a good idea too. When you set your goals, establish boundaries regarding spending and saving patterns.
3. Money secrets are a no-no
It’s OK not to disclose the secret handshake you learned from your college fraternity or sorority. It’s not OK to keep 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 put as much as possible on autopay. It’s not a set and forget. But you don’t want to get caught flat-footed with overdue bills 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. 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. Which comes first, the chicken or the egg?
It’s the age-old but unanswerable question. 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? The burden could fall on your kids.
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. Even setting aside a small amount every month can create an emergency fund that can prove vital in difficult situations-- moments where you don't want to have to worry about money on top of whatever hardship you are facing. If you received a stimulus check in April and you don’t have an emergency fund, please save it. You never know how you might need those funds in the future.
Money is a difficult topic. I truly understand that. Treat each other with respect and actively listen when you set goals. Goals provide you with a roadmap, and they can reinforce the bond you have towards each other. If you aren’t sure how to get started, please reach out to us. We’re here to help and get you pointed in the right direction.
There’s one more thing I should mention: procrastination is the enemy. Get started today.