How to Manage Money in Relationships…Just K.I.S.S.!
Money is the leading cause of break-ups and divorce. In a society where 59% of marriages end in divorce and breaking up is as easy as applying lipstick you have to wonder how many relationships can be saved with a little financial counseling. Here are a few things to think about when it comes to coupling your finances and making your relationship financially secure!
Things You Will Need:
- Calculator, Computer or Paper, either/or depending on how you manage your finances,
- An open-mind,
- communication skills,
- copy of bills, copy of bank and credit card statements,
- and a list of all of you and your partners’ expenses.
Instructions to K.I.S.S…Keeping It So Simple!
1. Before you can begin any budget or new financial plan it is important to understand who you and your partner are financially. Some people are frugal to a fault while others spend money haphazardly. Be honest and open about where you fit.
2.Once you’ve made it clear to each other where you fit in the world of spending money you need to communicate a compromise that both of you can live with. Even if you live in two completely different financial worlds, there are ways to tolerate, accept and compromise on money issues.
3.Discuss how you feel about money before you pool your income. Decide what your long and short term goals are. Do you want to own a house? When will you start a family? Are you saving for a wedding? Do you want to save now and spend later or vice versa? These are all important questions to ask yourselves.
4.Create a budget. Every couple, no matter how well off you are, should have a budget. Create a budget that includes everything from long term expenses and monthly bills to allowances and savings. People often forget the little things when they make a budget like weekly laundry bills, gas and haphazard daily spending, so make sure you think of everything. For most couples it is the small, everyday expenses that really add up.
5.Make sure you are both in agreement with the fixed budget and rules. Couples who talk about their money issues are twice as likely to survive them.
6.Some important things to include in every budget are: Always pay yourself first; 10% of your budget should go directly into a savings account before you do anything else. Your mortgage, rent, and utilities shouldn’t take more than 35% of your budget, try to have at least 3 months income saved at all times and paying off your debt should be a top priority.
7.Once you’ve decided what your monthly budget is, follow it! Communicate about how you’re spending your money. If one of you is in charge of paying all of the bills and balancing the checkbook make sure the other person is providing receipts or communicating about miscellaneous expenses so that you don’t overdraw an account.
8.If you decide allowances are necessary than you should both have an equal amount. When you have a mutually-agreed upon amount for personal expenses you are both free to spend this money the way you like. Give each other permission to ask questions about how money was spent, but be careful not to scrutinize. You have a right to know where your money goes, but your partner has a right to spend it too.
9.If you’re still in the process of working out the kinks in your combined budget then keep separate banking accounts for your allowance and miscellaneous activities.
10.Money can bring comfort and stability, but it can’t buy happiness. You should never make money a point of contention because it isn’t worth what could be lost. Be understanding, communicate and compromise and you’ll be able to work out the best financial plan to suit you both.
When YOU are done just give each other a Kiss and Keep it Moving Forward!