It is well documented that a lot of marriages fail because of money issues. These issues can include debt, lack of trust or spending problems. In addition, some partners can place a big financial expectation on their spouse, leading to stress. In order to help you deal with these challenges, below are some tips on avoiding common financial mistakes couples make.
Money is a big emotional trigger for many. Furthermore, money or its mismanagement can spell disaster for your children, as well as shortchange your future financial goals. Since both parties usually want to feel secure in a relationship, focusing on security should be the basis of money management in a healthy relationship.
Mistake 1 – Not Knowing Your Marriage Contract
Before you get married, understand the marriage contract (even if it’s not written) you are entering into. This contract will not only impact your current finances, but also your long-term goals like retirement and reaching financial freedom. How your mutual financial assets are distributed and managed will be dictated by both parties in a marriage. You must deal with important financial issues like taxes and debt management together to be successful.
Mistake 2 – Relying On Your Partner to Manage Your Finances
As a couple, both parties need to understand finance to some degree and take care of their own goals and needs. While in the past women were less likely to get involved in money management, today household finances are just as likely to be run by the wife and not the husband. There is nothing wrong with letting your significant other handle most of the money – but you should understand and be able to do it on your own, if you have to.
Mistake 3 – Combining Your Finances
Many couples wonder if they should keep separate bank accounts or merge their accounts together. This debate can also extend to other financial decision, like purchasing your home. You should be careful before sharing or splitting your assets, but combining your finances with your spouse is very common in many marriages and something you should seriously consider. Be especially cautious when dealing with debt you or your partner owes.
Mistake 4 – Keeping Secrets
If you have overspent, you should be honest and tell your partner immediately. The damage can usually be repaired if you don’t try to hide it. If you are making any major financial decisions or moves, keep your partner in the loop. It is important for both of you to know and understand your exact financial situation.
Mistake 5 – Dealing with Debt
Not all debt is bad – it is very difficult to buy a house without a mortgage, for example. When thinking about assuming any kind of additional debt, make sure to talk about this with your significant other. Both of you will be affected, so it’s important that each of you understands the consequences of your decision to go into debt.
Financial security is an important subject, and managing finances can often seem a little daunting. It is in your best interest to learn as much as you can about personal finance and investing and to tackle financial issues together with your partner. Finance books and the Internet can be great sources of financial education and information.
And if you feel like you need additional help, don’t be afraid to seek out a qualified financial planner. It’s your money and it deserves only the best!