September 12, 2019 | Posted by: Venus Zoleta | Personal Finance
September 12, 2019
What’s the worst relationship dealbreaker for couples? Your partner’s loud snoring or smelly feet may lead to petty fights, but the stress they cause is nothing compared to arguments involving money.
Handling finances in a relationship entails being on the same page with each other about money. Otherwise, you’ll always be fighting about money.
Newlyweds and partners who have just moved in together, listen up. Avoid financial mistakes—and major conflicts—with these nine money management tips for couples.
Between the two of you, who is the spender and who is the saver? Find out by taking a money personality quiz individually.
Whether you’re financially compatible or not is out of the question at this point—you’ll have to deal with your partner’s financial personality anyway for the rest of your life.
Nonetheless, the key to good financial health and marital bliss is knowing and understanding each other’s views and behavior towards money. If you know what to expect, you can make compromises and there won’t be as many unpleasant surprises along the way.
Also, it’s good to be aware of your partner’s strengths and weaknesses when it comes to money matters, so you can find ways to complement each other.
As soon as you move in together, make a plan on how you’ll split expenses as a couple. Agree on a fair and equitable system for handling finances. You may choose to combine your finances completely or keep them entirely separate.
Alternatively, you may want to share most of your expenses but keep separate budgets for personal expenses. This is one of the money management tips for couples that financial experts recommend because it allows each spouse to spend a portion of their income however they want without having to consult his/her partner or argue about a questionable purchase.
Another advantage of having your own account for personal expenses is that it can be your fallback for when you break up. When things don’t work out, at least you can untangle yourself financially after parting ways.
There’s a lot of money lessons to learn from the marriage struggles of Pinoy cinema’s iconic couple. Popoy took out bank loans to pay off other debts without Basha’s knowledge. Basha was also kept in the dark about the financial woes of their construction firm, as Popoy chose to deal with them on his own.
If you’ve watched the movie “A Second Chance,” you’d know how these things ruined their relationship. Their experience teaches us the value of transparency and open communication between couples. Lying to each other about money can cause bigger emotional issues such as a feeling of betrayal and guilt.
Be as honest as possible about your financial situation. No matter how uncomfortable it might be, let your partner know your outstanding debts, loans, income sources, investments, and other financial assets and liabilities. If you mess up, like going on an impulsive shopping spree, tell your partner about it and own up to your mistake.
This money management tip for couples will make it easier for you and your partner to fulfill the advice above on open communication about your finances.
Take your significant other to a date night at least once every three months not just to spend time together without any distraction but also to discuss your financial goals and progress.
While talking about things like budget and cash flow with your partner is the least romantic thing to do, so does fighting about money. So go ahead and schedule your money dates. Over time, having money discussions with your partner will feel more natural and comfortable for both of you.
David Bach, financial consultant and author of Smart Couples Finish Rich, offers one of the most sensible money management tips for couples: open an account each for emergency, retirement, and dream funds.
The emergency fund ensures your financial security as a couple. Ideally, it’s worth at least six months of living expenses and placed in a bank account such as savings, checking, or time deposit.
The retirement fund is for spending your old age together. While you’re still young, agree to pay yourselves first and put the money in long-term investment channels such as stocks and mutual funds.
The dream fund is for expenses that will help you fulfill your dreams together, like buying a home or traveling to your dream destination. Investments with midterm to long-term horizons such as Pag-IBIG MP2 are great places to grow money for your dream goals.
Struggling with your budget as a couple? Let technology help you.
There are mobile apps made specifically for couples who want to manage their finances better. Here are some of the best budget app for couples to consider:
Raising children is emotionally fulfilling, but it can also drain your finances. Giving birth can cost you up to more than a hundred thousand pesos already. You’ll also have to prepare for their living expenses, medical needs, and education. When not managed well, these costs can take a toll on your relationship.
Discuss with your partner about having kids—whether you can afford to have one or not right now. If you decide to have one, make the necessary financial preparations for a baby in the future. This is one of the best money management tips for couples who are planning to start a family soon.
Know each other’s company-sponsored benefits, (e.g., HMO and benefits for dependents), government-mandated benefits (e.g., PhilHealth and SSS maternity benefits), and life insurance policies. Discuss how you can maximize them to save money when one of you gets hospitalized. Make sure to enroll each other (and future kids) as dependents if possible.
Stress and tension arise when one partner, who is earning more than the other, tries to control spending decisions, causing the other partner to feel resentful and self-pity.
As a couple—married or not—it’s important to work together as a team. Instead of bickering over money, always encourage and build each other up. Be mature enough to check your ego, too. It’s easier to resolve differences that way.
These money management tips for couples aren’t a foolproof way to achieve a perfect relationship. No matter how well you manage your finances together, expect to face tough times financially and emotionally—some of which are beyond your control, like job loss or major damage to your property. What matters is how you deal with the negative experiences and weather the storm together.