It can be difficult to navigate the world of finances when two people come together in marriage. Each person has their own unique financial history, values and spending habits, and it is important to keep the lines of communication open when it comes to discussing and managing money. After all, money is the second leading cause of stress in a marriage and can become a major source of conflict for couples if not properly managed. Fortunately, there are some simple guidelines that married couples can follow in order to ensure their financial security and a healthy marriage. In this blog post, we will share tips to help manage money in your marriage and ensure ongoing financial stability.
1. We Marry For Love, but Money Problems Can Get in The Way of Our Marriage.
Despite the fact that we marry for love, money issues can quickly become an obstacle if they are not properly managed. When it comes down to it, having a solid plan in place for handling your finances as a couple is key to keeping your marriage strong and healthy. However, a married couple must always keep in mind that the main reason they decided to be with each other is because of love, and not money. Before you move forward with discussing finances, make sure you understand how your partner and yourself prefers to receive love and communicate on how both plan to express the love to fulfill each other. In his book the 5 Love Languages, Gary Chapman shows you the 5 Different Ways People Prefer to Express and Receive Love. Find out what is yours and your spouse love language and commit to do your best to express lasting love.
2. The Problem is Not Money, It's our Mindset About Money that Create the Problems.
One of the most important lessons to learn when it comes to managing money in your marriage is that the problem is not money itself, but rather our mindset about money. Money can become a source of stress in any relationship if we don’t properly manage our attitudes, beliefs, and expectations about money. We need to recognize that money is only a tool that if used properly, it can create positive outcomes if both partners are committed to each other, empower themselves, and support each other.
One time a couple came to my office and started to fight in front of me. She mentioned she was tired that he was always spending money with his friends and did not care about saving for the future of the family. He fought back expressing he was overwhelmed by her trying to control him and that she only cared about money but did not loved him. It was supposed to be a financial strategy session, but turned out to be a marriage and money counseling. I have countless of similar experience, so in a way I had the tools and experience to help them get thru that. They left my office happier, with not only a comprehensive financial strategy, but also a better understanding of their marriage.
I guide them in identifying their different mindsets, and allowed them to understand and support each other. I helped her understand that he in fact did care about his family - that is why he worked hard to provide for them. The fact that he spent money with his friends and did not save was just a way to get away from the stress of his work; and a behavior that transformed him into an spender. He then realized that she was not trying to control him, she was rather focused on trying to take control of the family’s future. Saving money was the way she saw they could secure it. By identifying each other's mindset and focus they were able to understand their own behavior and work together to create a more positive outcome both in their finances and marriage.
3. Identify the Good Money Habits, the Bad Money Habits and the Ugly Money Habits.
Effective money management is one of the most important skills that couples need to learn in order to build a successful future. However, building your financial future with your partner will be harder if you both don’t identify and understand their own behaviors and habits towards money. I identify habits as good, bad, and ugly. Knowing the good money habits will help couples maintain a healthy financial relationship, while being aware of the bad and ugly money habits will help avoid costly mistakes.
Good Money Habits are habits that helps your family prosper. Some of them are: Sharing and Supporting each other’s personal goals and objectives. Tracking expenses and maintaining a budget. Communicating openly and honestly about finances. Regularly saving for goals and having an emergency fund. Educating yourself about investments. Reviewing your financial plans, proper protection, and regular talking to your financial professionals.
Bad Money Habits: Spending without thought. Saving to Spend Later, Spending the money of your emergency fund for non-emergencies. Relying on credit cards. Avoiding talks with your partner. Judging your partners for their behaviors without trying to find solutions. Judging your partner for their goals and objectives.
Ugly Money Habits: Ugly money habits are those that may feel good or ok but are not good for a healthy long term relationship. For example, Not discussing money at all, paying bills later, using credit cards for gifts, paying off your spouse consumer debts, loaning high amounts of money to friends.
Many years ago (a year after I started working in finance) I met a good family guy. We connected and started a good friendship that went on for years. We never discussed money because every-time I tried to talk to him and share ideas, he seemed to believe he knew more about money than me. Years later, he got married and had a child, so I reached out to him and offer to share ideas and financial strategies. that could help him. He rejected my help stating that he was all set with his savings, and 401k investments, and did not have the need for a financial advisor. He also told me he was expecting a promotion with a nice salary increase, and that he would reach out to me to see how I could help him grow his money. He never reached out to me for that, and instead bought his house a couple of years later with his 401K money. At that point I knew he had bad money habits that he was ashamed of. I never insisted on talking about financial matters with him, but 2 years later he reached out for help.
While I was managing my firm in Wall Street, he reached out to me for financial help. He was looking for a financial company to help him consolidate his debt. He had accumulated over $43K in Credit Card Debts and Loans, his payments were too high and he made the realization that he was not properly managing his money. Managing his money was the least of his problems. He was a spender. The type of person that says when I make more money I will then start saving, but proceeds to spend more instead of saving more. He would not listen to me neither as a financial professional nor as a friend. No company was going to consolidate his debt because he was a high risk. The only solution was filing for bankruptcy, or signing up with a Debt Resolution Program. Although, it hurt his credit for a year or so, the debt resolution program helped him eliminate the debt in 3 years and he only had to pay $23,000. (he saved over $30K if you consider the interests). Even thought that program saved him money, it did not freed him of debt. Recently during covid he reached out again to help him get rid of another 20K debt. He failed to have a conversation with a professional and his spending habits took over his life. Spending habits and debt can ruin your financial future if not properly addressed.
By recognizing the good, bad and ugly money habits, couples can learn how to manage their finances better, build a stronger financial future and a healthier marriage, and avoid falling into uncontrollable debt and financial hardship.
4. Maintain an Open Communication with Respect and Support.
Maintaining an open communication with respect and support is key to managing money in your marriage. It is important to be honest and open about your financial goals, including how to allocate your resources. You and your spouse should both be involved in the decision-making process and always discuss any changes to your budget in an open and respectful manner. Having an understanding of the other person's goals and priorities can help to create a sense of unity and trust between both parties. By having mutual respect and support, you will be able to work together to come up with a budget that works for both of you.
A gentleman who came looking for strategies on saving money was concerned that the budget he wanted to use for savings and investments was too little to accomplish his goals. We reviewed his budget and analyzed his fixed expenses. After evaluating his cashflow I determined that he was able to save 5 Times more of what he wanted to save. He felt very overwhelmed and revealed that since he separated a couple of months before, he was spending much more money in going out with his kids. We ran some numbers and determined that he could cut expenses with his children in half, and save the rest of the money for his goal of buying a house.
He felt it was a good idea to cut expenses and save the money, but was very uncomfortable with doing that. I observed he was really having a communication conflict. He was in fact assuming his children would not feel ok with spending less money. Spending less meant having less fun, less gifts, and less food. So I gave him the homework to talk to his children about the goal of buying a house and how necessary was going to be to cut expenses of gifts and restaurants. He came back the next week crying. He said it was the best conversation he had with his children about money. They supported him and actually encouraged him to try to save more if possible. Communication is key in any relationship, a marriage, and a family.
5. Hire a Financial Professional to Guide You On The Steps of Building Financial Security.
It is important for married couples to be honest about their financial situation, discuss their financial goals, and create a budget that both partners can agree on. It might be stressful to agree who handles what of a family’s financial matters, but Anna Kawitter from Meratas Inc. shares here, 7 different ways you can approach money with your significant other to avoid financial stress. If you are not sure what approach will work best for you and your partner, it may be time to hire professional help. A financial professional can help guide you both on the steps you need to take to build financial security and is an effective way to ensure that you and your spouse are both on the same page. Together with your financial professional you will be able to create a financial plan that is tailored to your particular goals and needs, and that you and your spouse can both agree on. They can also provide assistance in managing your money and other complicated financial matters. To get in contact with an experienced financial professional reach out to our friends at World Financial Group - they have years of experience helping families build a better financial future.
Please, consider that marriage It's also not just about love or money, but it's also about our focus, goals, objectives, beliefs, and so many other nuances that as a couple it might be more difficult to communicate without expert help.
However difficult it might be building financial security with your partner, it is not impossible. By taking the time to understand each other needs both financial and in love, you are building the foundation for a better marriage. If you add the assistance of a financial professional who can help you identify your financial goals, create a budget you can stick to, and faciliate the financial conversation with your partner, you’ll be able to successfully manage your money and help your marriage flourish. With the right tools and attitude, you’ll be able to work together to achieve financial success.
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