How to manage finances is perhaps the most volatile area of contention encountered by couples. Each person brings unique financial practices and values in the relationship, which can contribute to the conflict. If not addressed proactively, disagreements over money can overshadow everything else in the relationship and potentially lead to its demise.
Couples should invest time discussing finances and work together to develop a financial strategy in light of the potential dangers of not doing so. Here are six questions that should be addressed in the process:
1. What is our current financial situation?
For a perspective of their current reality, couples must calculate their total debt (including debt that each introduced into the relationship) and the repayment terms. They should also calculate their combined income, taking into account taxes. Beginning with the necessary information, a couple can develop strategies to pay off debts quickly and develop a budget to follow.
2. Who will be responsible for managing the money?
If separate bank accounts are held, each person can be responsible for their own account. In such cases, decisions will be taken regarding the bills are paid on that account. If the couple has a joint account, however, it often works best if one person takes the lead. This person should regularly communicate their financial situation with the partner, especially when concerns are raised.
3. What expenses should be included in our budget?
The obvious budget items include items such as rent or mortgage payments, car payments, groceries, gas, clothes, memberships, subscriptions, and utilities. Items that can be overlooked include charitable donations, car repairs, and gifts. The budget should reflect all these predictable expenses, plus leave some room for surprises. It should also allow 10-20 percent (or more) of the total income to invest in savings.
4. What are your career goals?
are both people who pursue professional careers, which may involve more education and offshoring? If so, this will be done when career ambitions clash? Are there plans (and necessary) that each person will work to earn income? What if a person develops health problems? If children come into the picture, both continue to work or have a choice to take care of children? If a couple lives paycheck, the options are limited.
5. What is the level of life can afford, and what the living do we want?
A living will inevitably cost more money increases levels of stress, and creates financial pressures within the home. A lower standard of living can mean sacrifice, but it also results in less stress and more financial freedom. Instead of living large and spending more than you can afford, couples are better downsizing and learn to be content with less.
6. What are your plans for retirement?
The amount of money couples need to save and earn through investments is primarily determined by their expected retirement age. The sooner they hope to retire, the more they will save and invest to allow that to happen. In addition, if the couples are planning to travel extensively in their retirement years, they will need to save even more. The earlier a couple started to prepare for retirement, the better.
Ignore these types of issues could potentially disastrous for a couple. Couples who are equipped to answer questions or deal with problems would be wise to seek help from a professional financial advisor. Otherwise, many couples seek entry and the mediation of the clergy or a trusted friend. Whatever the process, a couple chooses, when looking to commit, they would benefit by establishing a financial strategy agreed for the sake of marriage.