When love is in the air it is easy to forget the realities of life. Money had been cited as one of the top reasons couples divorce so it makes sense that newlyweds need to pay close attention to how they are setting up their new financial life together in order to prevent money mistakes from ruining a relationship in the future.
While every newly married couple is different and no financial strategy works for everyone, there are some common mistakes people continue to make in their financial life when just starting out together. In order to prevent money stress from taking the fun out of marriage, it is important to understand the common errors people make and how to avoid them in your own relationship.
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Avoid These Married Money Mistakes
Here are the top 5 money no-no’s for newlyweds:
1. Never Discussing Financial Issues
Since money can be a touchy subject with the ones you love, many couples often fear having any kind of conversation about finances for fear of disagreement. However, not discussing how married money will work basically sets a couple up for many disagreements in the future. It is important for both parties to schedule regular financial sit-downs to discuss short and long-term goals as well as the steps necessary to achieve those goals. Ideally you talk about money are part of your pre-marital counseling. You might just discover that you don’t click when it comes to cash, and that can kill your marriage from the start. You might be surprised to discover your spouse is bringing a lot of debt into your marriage.
2. Not Creating the Joint Budget
Since many newlyweds enter a marriage with separate bank accounts and expenses, it is important to establish a married budget early. You just combined every other aspect of your life, so you need to combine your finances, too. Each party should bring all of their financial obligations to the table including monthly statements on all accounts they pay each month. It will also help to have a list of regular day-to-day expenses the couple has such as spending money for transportation, work-related expenses, and even the daily morning coffee and a newspaper. By creating a visual of your marital money situation, both parts of the couple have an understanding of how things need to work.
3. Avoiding Assigning Financial Responsibilities
All too often the job of paying all the bills, balancing the checkbook, calculating savings, and allocating cash for expenses falls to only one half of the couple. This is a sure-fire way to create resentment on both sides. The one doing all the work resents having to do all the work while the one not involved usually has no idea of what is going on with their money. Ideally, it makes better sense to schedule the regular sit-down at least once a month and divide the financial responsibilities between both parties. One person can pay the bills while the other can reconcile the bank and credit card statements. This also prevents one person from taking control of the money, and both sides get to learn as they go on how to improve the budgeting process.
4. Keeping Spending Secrets
As single people, it was probably easier to spend when you had no one else to answer to but now that you are married, you may be embarrassed by your spending decisions and feel the need to keep secrets and tell little white lies. This secret-keeping is often the downfall of relationships. Trust becomes an issue. It is much better to discuss financial expectations and limitations so that both parts of the couple have input in big financial decisions but still some maintain a sense of freedom with some of their income. Consider a spending allowance for each person to prevent the need for secrecy and set a price limit on what purchases can be made without the other person’s input.
5. Not Picking Battles
Often couples who marry are the polar opposites of each other. This can create a lot of tension, especially in the money department. It is important for newly married couples to give each other time to get used to how the other operates where money matters are concerned. As mentioned, keeping only one person in control of the money is not always the best idea so it’s best for each person to stay flexible in discussing money rather than one resisting change or refusing to give up control. If a heated discussion develops over financial matters, agree to take a break and resume conversation once everyone has had time to calm down.
Instituting a smart financial system early in a marriage will pave the way for a hassle-free future when more complex money matters begin to build. Mastering couples finance will make dealing with family finances a smoother process. If things start out too rocky were money is concerned, seek out professional help from a debt counselor who can help mediate the creation of the budget and start the financial planning off on the right foot.