Love is a wonderful thing, that is until you mention marital finances. For some people, the mere mention of finances and love in the same sentence makes them lose any romantic ideas. The two just don’t mix as they seem to be opposites. Love tends to dwell in the imaginary land of being with a perfect person twirling around in the rain. Finances, on the other hand, is a cold hard look at facts and numbers. The two just do not mix.
However, this should not be the end of it. The two can co-exist without losing interest on one or the other. There are couples who has been married for decades and enjoy a great relationship. And their finances are all on track. Marital finances is not a mythical creature that seems to exist only in the strongest of relationships.
The fact of the matter is that some couples use their finances to strengthen their relationship over time. Rather than being the reason for relationship problems, they are using it to give their marriage a different dimension. There are ways by which they are able to keep their finances from destroying their marriage.
And this might even be helping quite a number of married couples. Time.com shares that marriage rates are on the rise. From 31.9 in 2014, it jumped to 32.2 in 2015. Though finances are not the only reason, it certainly has a part in this data. As more and more people are getting married, money management would remain to be a big part of a harmonious relationship.
Tips to handle marital finances for the year
If you are planning to get married or already are and trying to figure out how to integrate financial management into your relationship, here are a few tips to look into.
Consider financial background and history
You and your partner would be coming from different backgrounds. It is important to take note that you would have a different financial history compared with your husband or wife. One of you might have grown up in a family that loves to spend and shop for new things. The other might be used to budgeting and being frugal with money.
This difference in financial upbringing can cause tension in any relationship. Moreso if they are left unchecked and the two of you just wait out what happens with your finances. The key to managing this factor is to catch it early on and talk about it so you can find a common ground. You can decide on a budget every month that you can spend on wants only after you take care of all your needs.
Consider talking to a financial advisor
When you are having a hard time finding that common ground and you want to seriously work out your marital finances, a financial advisor can help. This does not mean that you and your partner are financially incapable of managing your own finances. There are just times that a professional can help you lay out your financial plans better.
A financial advisor can help you set ground rules for your household budget. They can also work with you in planning specific steps to achieve your long-term and even short-term financial goals. They can even help you tackle household costs. At the very least, having an advisor also makes you and your partner more accountable with your goals. This is because someone else knows about your plans and regularly checking in on your progress.
Define your goals together
As a couple, you need to have common financial goals to aspire for. This puts you on the same page treading a path to a common goal. This is important if you want to succeed together. You need to be working hand in hand and know what the other person is up to. This also helps you prevent in exposing your partner in unnecessary financial risks.
You might be looking to buy a house to start a family, start a business or even some student loans you have to pay off. If you do not work together, one of you might be trying hard to set aside money for student loans while the other is saving for a downpayment on a house. You are stretching your finances out and would take a while before you cross out an item on your list. The importance of planning together is that you can both agree on what to do first. You then focus your efforts on the same thing and accomplish them much faster.
Agree on the use of your discretionary income
When you are managing your finances properly, there is a good chance that you are left with discretionary income at the end of the month. This is an amount that is left after you have attended to the more important aspects of your budget. Your bills are all paid for and the excess amount can now be used according to your discretion.
Of course, the best use for these types of money is to help you strengthen your future. Investments, reserve funds, and others are your best bet. However, you can both agree on a certain amount that you can spend on without having to discuss it with each other. Anything more than that then you would have to talk about it first.
Put together your cash flow together
As you try to manage your marital finances, one great way to be on the same page with your partner is to see your cash flow. This activity helps you both understand how your funds are being spent on a daily, weekly or even on a monthly basis. This can help you work out money problems and make your finances more transparent.
Decide on where to invest as a couple
There will be things that you need to do together and that includes investment decisions. As a couple, it is important that you both have a hand in deciding your future and investments play a crucial role in this. Are you going to look at stocks or simply set up a business? Are you going to go back to school for post-graduate studies or simply take up seminars to improve your skill? The important thing is that you work together and decide together. Although Bgsu.edu shared that divorce rate is lower from 2014 to 2015 by 0.7%, financial misunderstanding still ranks high in reasons for divorce.
Get a postnuptial agreement
The American Academy of Matrimonial Lawyers’ website AAML.org shared that half of divorce lawyers have seen an increase in couples seeking postnup agreements. There is a stigma surrounding prenuptial agreements and it can spill over postnuptial agreements. It is important to understand that this is a helpful financial strategy. This document can help you put in place a framework that would secure your finances in case of divorce or even death.
Managing marital finances would be a crucial step in ensuring that you and your loved one would have a lasting relationship. Marriage is not just about waking up next to the person you love the most. It also means being able to provide for their needs in life. It can also help you enjoy each other’s company for a long time.