Managing Your Money as a Coupleby Vicki Karigiannis
published August 16, 2013
6 tips on merging your finances
Money: it is listed as one of the main sources of conflict in relationships, and one of the top reasons married couples get divorced. Contrary to popular belief, it is not the lack of money that is the problem but, rather, the mismanagement of it. It is those with the existing inability to budget who bring these poor skills into a relationship, as well as people who know how to manage their own money but are at a loss when a second person is involved. We want to help those looking to merge their finances with the one they love most, so we’re offering a few tips on how to do so harmoniously.
Be honest and up-front. There is a time and a place to bring up one’s finances in a relationship. Clearly, the first date is not one of them. When you’ve been seeing someone for a good while, however, and there is talk of moving in together or getting married someday, you’ve reached a point in your relationship where it needs to be brought up. If you’ll be combining your finances, after all, sweetie should be aware of any debt you may have.
Maintain separate accounts. Joint accounts are essential when married or living together, as there are many expenses that you incur as a couple: rent, car payments, groceries, utilities, vacations, and so on. Each person simply transfers the same amount of money every month into the shared account. However, it is still imperative to maintain your own credit card under your name (to maintain your own credit rating), as well as drop in money into your personal accounts. This is for your own needs, such as lunch with friends, shopping trips, hobbies, etc. Any extra money saved is smart to have in case of emergencies, for example (and we don’t mean to be so negative), if you decide you want out of the relationship and need to move.
Have similar budgeting styles. When one half of a couple is on the thrifty side and the other is all about lavish spending, problems will eventually arise. To live in fiscal harmony, both parties need to be on the same wavelength when it comes to spending and saving—perhaps find a balance, with the frugal one attempting to pinch less pennies and the big spender budgeting his or her money wisely. And when it comes to making an expensive purchase (a big screen TV or a new car), it should be a discussion you have together.
Get a prenuptial agreement. We know: prenups aren’t romantic in the slightest. However, if you’re getting married and own more assets than your significant other, you need to protect them (and yourself) in case of divorce. If you’re simply cohabitating, we say it is wise to take stock of what you own, what your beau owns, and what you purchase together. Write them down and list each item’s value—this will come in handy and avoid conflict in case of a break-up.
Don’t keep score. Let’s face it: in many relationships, there are times when one party makes significantly more money than the other. If one is still in school while the other has already entered the workforce, the latter is likely the one paying the rent, groceries and utility bills for the time being. This is not something to be held over the other person’s head. After all, you likely went into this relationship knowing how much (or how little) they’d be able to contribute financially to the relationship. Sweetie will likely help with the bills once he gets that cushy job but, for now, we’re sure he (and you!) contributes a lot to the relationship in other, non-monetary ways. And remember, all you really need to be towards each other is a loving and supportive partner.
Remember: you’re a team. When you choose to spend your life with someone, you take on the world together. So whatever comes your way, you tackle it as a team. This includes financial hardships. If one of you has debt stemming from student loans, for example, you just don’t leave the other to swim neck-deep in it without a raft. You come up with a budgeting system together to help pay off your lover’s debt as quickly as possible. Two people who are financially stable and in-sync are also as such in other areas of their relationship.
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