Oh let me count the ways that I love you! Is sharing your finances with your significant other one of them? Sadly, couples argue about finances more than anything else. Combining finances with your spouse and talking through how each of you has different financial habits is not only important for financial success but will also increase your chances of romance tonight! Here are some money tips for couples.
Moneytalk for Couples
The first step is to have The Money Talk. This is involved and you must reveal all of your numbers – savings, debt, retirement account, etc. Compile your documents, sit down with your spouse, and go through all of the items.
You also talk about your dreams and goals and how they relate to money. Some examples include, but are not limited to, getting out of debt, traveling more, or buying a home. These can be whatever you and your spouse decide. It is very common that spouses will have different opinions about money. You ought to talk about how you, as a couple, prioritize these goals and dreams.
This is a vulnerable conversation, but what a wonderful person to discuss it with – your life partner – the most important person in your life.
Combine Your Finances with Your Spouse
When you are talking through the numbers, it will be a lot easier to keep track of everything when you marry your finances. You can start by opening a joint bank account that combines your incomes as well as your expenses.
While going through your income and expenses, it’s best that you and your partner work on developing a budget. As you go through this exercise, you will realize that you and your spouse have different attitudes, feelings, and ideas about money. This is normal. Going through a budget forces you to have these conversations upfront so there will be fewer arguments in the future. For example, you may be surprised by spending $150 on a pair of running shoes, whereas your partner could be flabbergasted that lunch costs $20.
Another area to pay attention to is how your money is invested across all of your accounts. This is also known as asset allocation and it should be appropriate for your risk preference. There is no need in taking risks that aren’t appropriate and could be dangerous for both of you in the long run. On the other hand, the combined risk appetite may not be high enough to reach certain objectives.
Set Up Automatic Payments
It is hard to save when there are so many needs and wants. Setting up automatic payments helps tremendously. When you set up automations you can enjoy life instead of worrying about your finances. You will look back, smile, and thank yourself for doing it. If you haven’t done so already, set up automatic deductions from every paycheck for your 401(k) contributions.
Other automatic payments should be set up for accounts like your emergency fund, investing account, savings account, 529 plans, and an account for a large purchase, such as a house, etc. How much should be saved for each goal? That is for you and your life partner to decide. I can help you make an informed decision.
Your life partner is the most important person in your life – for everything – love, emotional support, and finances. If you and your partner need help talking through some of the money tips for couples described above, please feel free to set up a free consultation.