Financial decisions can be one of the most stressful parts of being a couple. Whether you’re saving for retirement, planning for your kids’ college education, or trying to figure out what kind of house you can both afford, these decisions can often feel like they’re going to sink your relationship.
But it doesn’t have to be that way! Couples who make financial decisions together are more likely to stick with their plan and stay on track. They’re also more likely to feel supported by their partner throughout the process.
And when you work together toward a common goal instead of against each other, you both end up happier and better off as a result.
Talk About Your Goals
Financial decisions are a lot trickier when you’re not on the same page as your partner. If you and your partner don’t talk about your goals and how you want to get there, you could end up working towards different goals entirely.
When you work together, you have a better chance of making decisions based on your priorities and each other’s goals. You also have a better chance of being on the same page when it comes to costs and priorities.
When you’re trying to save for a house or retirement, it’s important to have realistic expectations. If you both think you can afford a two-bedroom condo in Brooklyn, you might end up a little disappointed when it costs more than you expected.
On the other hand, if you both realize that you want a bigger house in the suburbs, you’ll be able to save more money toward that goal. When you work with each other to define realistic goals, you can avoid setting yourself up for failure and disappointment.
Consider Your Financial Strengths and Weaknesses
When you have a clear understanding of your financial strengths and weaknesses, you can work together to make better financial decisions.
If one of you has a ton of experience as a saver and is great at calculating monthly expenses for a new house, for example, that person can help the other see where they’re falling short when it comes to saving money.
It’s important to take a step back and look at where you and your partner are strong and where you’re weak when it comes to finances. If one of you is incredibly good at managing money and the other isn’t, you can work on ways to help your partner better manage their finances.
You can create a budget together, plan ahead, and teach your partner how to save money. It doesn’t do either of you any good if you both end up in debt because one of you is better at managing expenses than the other is.
Educate Yourself
Couples that make financial decisions together are also more likely to find ways to educate themselves about their finances. Whether you choose to do it together or separately, you should find time every few weeks to read about your finances.
Books about financial planning, budgeting, and investing are often helpful, as are podcasts and articles on websites like NerdWallet. Reading will help you understand your finances better and give you a better sense of what you can realistically expect from your relationship together.
You can also get a better idea of how much debt you currently have, how much you owe, and how much of everything else you have left. It can also help you identify areas where you could be working together as a couple better.
Educating yourself will also help avoid a few of the common financial mistakes that people make when they’re not educated about finances.
Define a Mission Statement
Now that you’re better informed, it’s time to start defining the real purpose of your finances. It doesn’t have to be complicated, and it doesn’t have to be written down.
But it does need to be something that you truly feel is the purpose of your finances. Write down what you feel is the purpose of your finances, and then talk about it with your partner.
It could be the purpose of helping your family make it to college, providing for your retirement, or simply being able to do whatever you want without worrying about money.
Set Up Joint Accounts and Credit Cards
Open up joint accounts and credit cards as soon as possible. Joint accounts are especially helpful when it comes to debt, since they allow you and your partner to split the payments on whichever debt you take on.
It’s also a great way to make sure you don’t miss out on payments and make payments on time. Joint accounts aren’t always required, but they’re often the best option for couples. If you don’t have joint accounts yet, you should open them as soon as possible.
Joint accounts are great for sharing bills, splitting debt payments, and helping each other stay on track with finances. You don’t have to commit to an open-ended partnership before you make sure that your finances are in order.
Estimate How Much you’ll need
It helps to have an idea of how much you’ll need. You can do this by talking with your partner about what expenses you expect to have and how much those expenses are likely to cost. If you ever need a modest quantity of quick cash, visit InstantPaydayNV, and you’ll get accepted for a payday loans near me no credit check in just 5 minutes.
Estimate the cost of housing, basic living costs, taxes, and insurance before you look at what you actually spend. It’s important to remember that your estimated expenses might be a little lower than what you actually spend.
That’s because you’re estimating based on how much you spend now, so you might be a little off. This is OK, and you shouldn’t let people pressure you into making changes that aren’t actually necessary.
It’s better to overestimate your expected expenses than to get yourself into debt just because your original estimate was a little off.
Deal With Surprises
Finally, couple that to deal with unexpected expenses as soon as possible. You’re going to end up paying for things you don’t expect to pay for, and you’re going to end up dealing with unexpected expenses.
It’s better to get used to that now than to wait until you get into debt and end up paying extra money that has to come from somewhere else.
Negotiate before you make any big decisions
The best way to make sure you’re making financially sound decisions is to negotiate before you make any big decisions.
When you make a decision based on what you want to happen, you can forget to factor in things like how much it will cost or how much it will take up your resources.
Put plan into action
Once you’ve set up your joint accounts and credit cards, you’re ready to start making payments.
It’s important to do this on time and in the amount that you told the bank you would.
Missing payments not only result in fees, but they also mean that you’re borrowing money that you’ll have to pay back with interest.
Wrap-up
Did you know that financial stress can also be caused by an imbalance in the amount of money that each partner brings into the relationship?
Working on your finances together can help you identify any big imbalances in your finances and make adjustments to bring them into balance. It can also help you identify any areas where one of you is falling behind because of an issue that isn’t related to finances. Financial decisions can feel like they’re going to sink your relationship, but they don’t have to be that way.
Working together toward a common goal instead of against each other, you both end up happier and better off as a result.
