Six Steps To Gaining A Healthy Financial Relationship (Part 2)
Last Friday we discussed Step 1-2 of the Six Steps to Gaining A Healthy Financial Relationship. Today, we continue with Steps 3-4.
Step 3: Learn to control emotions
Emotions do exist, so it is often a challenge for most to put emotions aside or at least channel them when discussing topics such as finances. This subject, however, goes further if persons involved in the conversation are able to remain as objective as possible. Do you best to focus on solutions versus the problem and to try to have an open and exploratory mind when speaking with your partner. Try to explore what their perspective is and where there beliefs come from. Do you best to avoid minimizing their comments or never put them down.
Step 4: Develop a mutually agreed upon plan to work toward goals and financial system that is monitored on a regular basis
Once you have gained as much mutual understanding as possible, the next step would be to merge your ideas together to develop a specific plan that you both can agree on. It is important to note that both parties have to be committed to actively working on the plan and open to regular communication as it relates to it. You will also need to develop a system for managing the day to day finances that you both agree on and actually works for your unique relationship and household. Some approaches to explore are as follows:
- Individual Approach
- Finances are kept separate in individual accounts. Couple agree to be responsible for their own predetermined expenses. This option may work best for couples that are not open to merging any part of their finances or simply just don’t agree on spending and saving behaviors.
- Communal Approach
- Finances are merged into one joint account. All income and expenses go in and out of the same account. This is an option for couples that are on the same page as it relates to finances and have similar spending and saving habits. Please note that this approach often does not work for couples that have different savings and spending habits. In fact, it can oftentimes lead to frequent arguments.
- Individual/Communal Approach
- Finances are kept separate in individual accounts, while a joint account is established solely for predetermined household expenses. Each person deposits a set amount each pay period or a percentage of their income to go toward the household expenses. Withdrawals are only made for mutually agreed upon expenses.
Some couples share a joint savings account as well with the understanding that the savings is to only go toward a specific item that the couple is saving for or for household emergencies. It is recommended that the couple agree on what is fair and balanced as far as contributions and withdrawals. Again, this may work best for couples that have different spending styles, yet agree there needs to be a balanced system in place to pool finances toward household and joint expenses. With this approach, couple agree that anything that is remaining in each other’s individual account is up to that person to spend and/or save.