No couple likes to fight, especially when it comes to finances. Unfortunately, money is the leading cause of stress in relationships. And this isn’t only a problem for couples who are tight on money, as a survey has shown that the more your income increases, the more finances will put a strain on your relationships. What this shows is the importance of being on the same page as your partner when it comes to finances, no matter your incomes.
Sunset Bank & Savings has compiled a list of five common mistakes couples make with their money and how you can avoid them to lessen the stress on your relationship!
- Not Talking About Money Before Marriage
It’s important to have an idea of your future partner’s spending style. Is your partner tight with money because they grew up not having a lot? How does this impact how they envision your lifestyle to be once married? What’s their credit score? It is important to have this conversation, in order to refrain from becoming as upset or surprised when one of you splurges/invests. This keeps a nice checks and balances. Take this fantastic quiz to figure out your money type!
- Not Having a Budget
If you are too late to avoid mistake #1, this is the perfect time to have that conversation with your spouse. “Failing to plan is planning to fail.” Take stock of what you have coming in, what you owe and what you have for “extras.” This will help to prevent keeping secrets from each other about your spending, because everything is on the table. Be sure the budget works for BOTH of you, long term. You can even get your kids involved in order to teach them about money and why having a plan to stick to is important.
- Not Having Separate AND Joint Accounts
Are you a couple who only has a joint or separate account? We recommend both! Joint accounts make it easier to share in bills and debt together. However, it is still important to have your own account, so you can still feel autonomous in your decisions to splurge (within range of your budget).
- Waiting 30 Years to Pay off Your Mortgage
Just because it is an option, doesn’t mean you really need to take 30 years to pay off your debt! If you do take the full term to repay the debt, you will pay significantly more in interest. Every extra payment that you make towards your home will be applied to the principal balance. This will enable you to sign that last mortgage check much sooner, enabling you to put money toward retirement, or other goals you have together.
- Letting One Person Make Decisions
Even if only one of you is bringing in a salary, it is imperative that you are both involved in the financial decisions. If you have one person who is physically making the payments, you should both be reviewing your finances monthly, and making adjustments as needed. Friction can happen when one spouse makes the financial decisions causing the other to feel like a child with a set amount given to them each month. Even if one of you is more financially smart, both should be included in the decisions. There is less of a need to keep secrets from one another when you both have purchase power and communication about your short and long term goals.
Making a plan and sticking to it together can help lessen financial stress in your relationship. If you feel stuck on where to begin, set up an appointment to speak with one of our specialists at Sunset Bank & Savings to help get you both on track to being in charge of your finances.