Do Couples Talk Enough About Money?

Written by adminJune 8, 2019
Real life

While you personally think you might have a good handle on money, marriage can complicate things a bit. What happens if your spouse has a completely different mindset towards money than you do? It can really spell disaster for your marriage. But most people don’t often see it as a challenge. They think having two incomes will make life easier. Not necessarily!

Elle from Couple Money, a finance blog she writes with her husband, also thought it would be a great thing for her finances. She learned a huge lesson very quickly. It turns out she was the big spender and her husband was a saver. It was a crash course for both of them to create a plan they could both get behind.

“Very quickly we discovered we had different ideas on money!” she says. “I came from a background where if you can afford the payments, you were good. My husband was much more conservative and cautious with money.”

Coming together to create a plan was ultimately in the best interest of their marriage. It even allowed them to save up a bit of money for a rainy-day fund. They actually took the time to communicate about their spending and work on a compromise. Sadly, many couples do not have that same level of communication when it comes to money.

Marriage and Money

There’s no doubt that two incomes are better than one, but that statistical advantage doesn’t matter if a couple can’t agree financially. 36% of couples say that their biggest stressor is money. This is according to a 2018 study from Ally Bank. Only 17% and 13% of people said health and family are their biggest stressors.

A lot of the problem, again, comes down to miscommunication. Engagements are a great time that involve a lot of planning. How many couples undergo financial counseling? Do they even talk about money or just make a bunch of assumptions about two incomes being better than one? It appears to be the later, as the number one cause of divorce in the U.S. is money.

According to another study from John Hancock, three-quarters of couples are actually confused and nervous about attempting to save money with their partner. 57% of people even try to avoid bringing up money on any time of monthly or weekly basis. They know it only leads to arguing and contention.

“Advance planning could provide a much-needed boost in financial security for those who unexpectedly end up alone at any phase of their lives,” says David Lynch, managing director for TD Ameritrade. “Considering divorce or the loss of a spouse is a smart addition to any long-term financial plan. It’s no different than planning for things like a major illness, disability or potential long-term care needs.”

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The 6 Financial Steps My Wife and I Had to Take Before We Got Married

Written by adminAugust 11, 2018
Life Style

Getting married is one of the greatest days of our lives, but it’s also one of the most nerve-wrecking decisions you can make. It’s easy for self-doubt to creep in as you prepare for living with someone else for the rest of your life.

One thing that terrified me was the reality that money problems are the number one cause of divorce. Citibank released a survey that revealed 57% of all marriages end due to money issues. They can include:

-Not communicating openly about money issues.
-Dishonest about money.
-Some type of power struggle over who controls the money.
-Stress when money is tight or someone loses a job.
-Not saving for an emergency.
-Potential lack of self-worth if the family isn’t making enough money or considers themselves poor.

These are all issues that can happen to any family. Before we married, I sat down with my fiancée to hammer out the details. You may already be married or single, but this article is still important for when that time comes to have that discussion.

Jordan Sowhangar, certified financial planner from the investment company Univest, agrees that couples need to put together some type of agreement.

“Have everything in writing, and set expectations about debt and income beforehand,” he said.

The worst thing you can do is get well into the relationship or marriage and find some major financial incompatibilities.

“Say someone is used to spending $200 a month on eating out. The other person loves cooking, going to farmers’ markets and wants to eat in every night,” Sowhangar said. If you’re a saver and your partner is a spender, that’s something that needs to be addressed early.

Here are six simple steps we took before we got married:

1) Agree to Talk It Out

This might seem like a simple proposition, but it can be the biggest step you take in keeping your marriage as peaceful as possible. If most couples have spats about money, coming to an agreement is important.

The fact that you’re breeching the subject takes a lot of courage, as most people don’t like to talk about money. Don’t wait until you mush your budgets together to get this done. To find out your money type, do online quizzes. Write down independently what your money habits are and compare notes.

It’s important to be 100% honest in your assessment and to talk about your goals, both short-term and long-term. And if you find that neither of you are particularly good at saving money, you should make sure you get in some financial counseling before saying, “I do!”

2) You’re Going to Have to Compromise

The worst thing you can do is going into this meeting ready to set the rules according to your standards. It can be difficult to find two people who are so financially compatible that they agree on everything. It probably won’t happen and you’ll have to compromise. Your partner will also have to compromise.

The first thing you can do is admit that you make some mistakes. Your style isn’t 100% perfect and without error. You might find different things you have to work on after taking an assessment.

If you’re a saver and your partner is a spender, then you will have to work out a budget that keeps both styles in mind. Any relationship will be give-and-take, so figure out a way to work it out between you.

3) Don’t Stop Talking to Each Other

The worst thing you can do is get complacent. Just having that one talk at the beginning won’t be enough.

“This isn’t a one-time conversation before you move in. Talk about it weekly, monthly or quarterly. The goal is to lay everything out on the table so there are no surprises,” said Sowhangar.

The reality is, your life is going to change. Your budget will change. The economy is a rollercoaster full of good and bad times. Retirement savings will be different. Investments can dip or surge. Your financial future is unpredictable. Even the richest have lost it all.

You can be prepared for all contingencies by having regular discussions. Plan your monthly budget accordingly. We did this regularly before we married and plan to do it long after.

4) Decide to Share Responsibilities

You and your partner may make differing amounts of money. That’s why often doing the 50/50 method of sharing might not work in one of your favors. If you make $60,000 per year and your partner makes $25,000, what’s fair in sharing the bills 50/50? Of course, hopefully your partner DOES want to contribute to the family.

So, the best way to do this is to delegate responsibilities when deciding to pay the bills. Another thing to keep in mind is who is doing most of the work. If your partner is doing the cooking, the shopping, and the cleaning, you might be glad to take on a larger portion of the bills.

Also: http://financialhelpers.com/5-ways-to-pay-of-debts-without-depriving-yourself/

This is especially true if you’re a stay-at-home parent, which studies have shown is like holding down two full-time jobs, with none of the pay or benefits. But, in today’s America, it’s difficult to get by without both partners working.

This should also fall under the compromise section as well, because you might end up having to take the higher share of the bill paying if you make more money.

5) Don’t Fully Combine Accounts

If your partner works and makes money, they may feel trapped if suddenly you both combine your bank accounts and they have no freedom to spend any of their money. Yes, it’s probably easier to get a joint account and pay all your bills from that, but it’s not good to stifle your partner’s ability to make their own decisions.

It also provides an option to protect yourself. There’s no shame in admitting that sometimes, couples get crazy and do stupid things. They can get mad and decide to clean out the account or run up a credit card bill. To allow each individual to have their own account and use a joint account for rent, groceries, or other shared bills is the safest option.

6) Don’t Forget the Will

Accidents happen and people die. It’s one of the two things that you can expect in this life, that and taxes. Even if you’re not married but in a serious relationship where you move in together, it’s a good idea to have a legal document written up. Who gets your money? What possessions belong to which person? What about the rest of your family?

These are questions that often get fought over in court after a loved one passes away. Protect yourself, your partner, and the rest of your family by having a will.

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How to Make Sure You’re Financially Prepared for Marriage

Written by adminJanuary 16, 2018
Credit & Debt Settlement , Personal Loans , Saving

Congratulations! You’re engaged and about to go on what should be the greatest adventure of your life!

Of course, in your mind, you’re working through all the ways the two of you can successfully navigate any stormy waters that might brew. You make plans and prepare, discussing everything to ensure the marriage starts off on the right foot.

But one area where couples struggle is when it comes to finances. Maybe you’ll have the preliminary talks (What do you do? How much do you make?), but a survey from the National Foundation for Credit Counseling has revealed that 70% of people had ‘negative feelings’ about discussing money with their fiancé.

20% of those surveyed believed that a real, in-depth conversation would either end in a fight or the end of the engagement altogether. The consequences of this are devastating!

Lack of Communication Reveals Nasty Surprises

We’re all different in the way we approach money. These differences can lead to difficulty after the wedding. Our views often come from our parents and the way money has been spent around the house as a kid. If your parents helped you get a savings account at an early age, you’ll be more likely to save.

On the other hand, if you received a lot of gifts and weren’t taught to save, saving might not be in your vocabulary. This often leads to a rift between couples who were raised differently. They join in matrimony only to find out their spouse is a huge spender and has been hiding a massive pile of debt under their mattress.

Now that debt belongs to you. Isn’t marriage fun?

This is why money problems are the number one cause for divorce in the United States. Couples who don’t communicate later regret it and are often ambushed by a partner who doesn’t share their same views. And when incomes are combined and bank accounts are shared, those can be dangerous waters to tread.

Improving Your Odds

If you’re intent on having a successful marriage and NOT becoming another statistic, then you’re going to have to get over the fear of having the talk you need to have with your future spouse. It’s 100% CRUCIAL for a good marriage to get the financial stuff situation beforehand.

Here are some ideas to help ensure you’re financially prepared for marriage:

1) Don’t start off your marriage in debt.

Weddings are expensive. They are often one of the most expensive milestones in our lives, next to getting the house and the car. As much as we dream about having this extravagant wedding, full of beauty and wonder, it can set your marriage back in the long run. It doesn’t exactly set a good tone going forward starting out your lives together in debt.

The average wedding in the U.S. costs $25,000, and that’s without the honeymoon or any of the other expenses that come with marriage. How many years will it take you to pay off that one single day? Plan a budget and stick to it! Sticking to the budget is the difficult part, as the cost of a wedding can add up fast.

2) Have the difficult talk.

Be aware of your partner’s financial situation. Are they a spender? Are you a saver? It’s okay to have different ideologies towards money, but it requires a lot of open communication to make it right. Sit down with your partner and make sure you have a serious, but non-judgmental review of their spending habits. Go over their debts and a talk about ways to make it work.

If you’re a saver, try to be understanding that people make a lot of mistakes when they’re younger. Most people often don’t know how to save, especially when they’re single and don’t need to. Now that things are getting real and responsibilities are piling up, it’s time to get serious and work out a budget together.

3) Build up your savings.

Married couples often live to their max on both incomes. If you buy a house, you’re most likely going to do it together with the mortgage based on what you both make together. That’s perfectly fine, but what if one of you loses your job? This is where being financially prepared can save your marriage from a ton of heartache and frustration.

The vast number of divorces over money happen when times are difficult. The economy slows down, jobs are hard to come by, and the family loses out. That’s why it’s more important, especially in the beginning, to forgo some comforts to put that money into a savings account. Build up at least six months’ worth of emergency savings in case the worst happens.

4) Plan, but take your time getting there.

There’s no doubt you spent a lot of time daydreaming about white picket fences and a yard full of kids from the moment you feel in love. To go along with building up your savings, hold off on making the big purchases for a while. It’s not going to hurt to rent a decent apartment for a few years while you build up your savings.

Do you really need the top of the line car or the best cable package? Whatever the case may be, sit down and plan out your future. Cut spending while you can, save as much as possible, and keep your plans close to your heart. Write down a timeline with your goals in place. Maybe buy a house in 5 years rather than right at the beginning.

Are you prepared for children? I wouldn’t be surprised if many kids born are happy little accidents. You can plan for them all you want, but they have a knack of showing up when you least expect them to. Either way, these are all things you should sit down together and talk about. Write up a budget, determine what will go into savings, and grow together.

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