By Paul S. McNulty, CFP®
Talking about money, especially with a significant other, is a topic that can go a number of ways. Maybe you are one who enjoys discussing your finances with your special someone. Or maybe your budget, financial goals, and plans are topics you two tend to avoid at all costs. As tough as going over finances can be, we all typically understand the importance of regular communication in this area, especially when your bank accounts are shared. However, while we’d all love to say we fall into the first group, a couples and money survey reveals that 26% of Americans turn a blind eye to the issue of finances in their relationship even though they understand the importance of discussing it.
Unfortunately, simply ignoring the subject only creates space for misunderstandings and increased tension. Knowing this, it’s not surprising that money is the primary reason for arguments between couples. This is a serious issue that can reach much further than just your wallet. In fact, disagreements about finances are the most common predictors of a future divorce.
Why is it so difficult for money and love to peacefully coexist? For one, finances tend to stir up plenty of emotions on their own and can cause stress in everyday life. Because relationships often tend to do the same, couples may try to keep the peace by eliminating the emotionally charged, potentially stressful topic of money. In addition, even when we are open and able to discuss our finances, most of us have our own unique financial personality and correlating opinion on how to manage money. Some of us are savers, some are spenders. Some of us may be conservative, while others are free spirits. These differences can cause friction and discord, which then affects all other aspects of the relationship.
But no matter what the statistics tell us, money doesn’t have to be a stress point in a relationship! Here are a few simple strategies that may help couples avoid financial friction.
Unfortunately, honesty regarding money isn’t a guarantee in a relationship. It’s important for both partners to offer full disclosure of their finances and be open about expenses, regardless of whether you’re married or not, live together, or have joint or separate bank accounts. You and your significant other should be aware of how you spend your money, especially when it comes to larger expenses, loans, or ongoing fees. By maintaining an open line of communication regarding spending habits and upcoming bills, you may be able to avoid such confrontations.
Set Healthy Boundaries
This one may seem like a no-brainer, but it is often avoided or overstepped. Sit down together and discuss how much can be spent per month on non-essentials. Establish and agree upon a few basic guidelines and create a structure for how you will spend and save money. It’s important for couples to be on the same page regarding their finances. Establishing a monthly budget that allows for a set amount of “fun money” can not only avoid overspending but allow each of you to plan for what you want. If one of you is more disciplined than the other, you might consider having the disciplined spouse manage the monthly budget and spending.
Often one spouse acts as the Chief Financial Officer of the household, managing all bills, budgets, savings, investments, and insurance policies. However, it can be helpful for both partners to understand their spending versus their saving. Be intentional and plan time to sit down together once a month and review credit card statements, account transactions, and other bills. This not only gives you two sets of eyes to check for possible errors, but it also allows you each to have a full understanding of where your money is going and eliminates assumptions or accusations. Ongoing transparency and input from both partners will strengthen your relationship and create a true partnership.
Set aside a portion of pocket money that you and your spouse can each spend every month on something you love, whether it’s a massage, a round of golf, or a steak dinner. Along with saving for long-term goals, set small objectives you can reasonably accomplish each month and include the ability to celebrate your success in your budget.
Find An Objective Financial Partner
Sometimes the best way to ease money tensions is to work with an objective third party, whether that’s a financial professional, a marriage counselor, or both. A financial professional can work with you and your spouse to review your financial landscape, identify any gaps in your insurance coverage, assist you in establishing short-term and long-term goals, help you stay on track, and provide professional and knowledgeable advice.
Surely the topic of finance can cause tension from time to time—that’s normal. However, money doesn’t have to become a constant source of concern in a relationship. It should not be that way. Do yourself and your loved one a favor and push past the awkwardness, invest the time to address spending habits and savings goals, uphold transparency regarding purchases, and communicate effectively.
At Boston Metro Advisor, we offer wealth management to address your entire financial situation. We partner with you to see your finances from a holistic point of view, create customized strategies, identify long-term goals and the steps needed to pursue them, and track your progress as you move through life. If you have questions about your financial situation, desire advice or education on investing, or have yet to get started strategically planning for your retirement, I’d be happy to help. Contact us for a complimentary consultation by calling (781) 995-0253 or email me directly at [email protected] to start your journey toward financial harmony today!
Paul McNulty is the founder of Boston Metro Advisor with over 20 years of experience helping people navigate the ups and downs of the economy toward the financial future they envision. His education consists of a Bachelor of Science in business administration from the University of Rhode Island and the CERTIFIED FINANCIAL PLANNER™ (CFP®) professional designation.
Paul’s experience and education have made him a multi-faceted professional capable of assisting people with virtually all their financial needs. His services include every facet of retirement planning, from 401(k) rollover services and income planning to wealth management and estate planning. Paul has been active in his community over the years as a youth sports coach. When he’s not spending time with his wife, Cindy, and their two children, who are both recent college graduates, Paul enjoys reading, playing golf, and fishing. Learn more about Paul by connecting with him on LinkedIn.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.