How to Manage Money in a Relationship

Some would say that love and finances are like oil and water. Trying to mix them together is a struggle at best, but trying to keep them apart could be worse. Couples that fail to address key financial issues will jeopardize the relationship, especially if one blows up. When two people form a union to share their lives, it’s also a financial union. Here’s how couples can keep that critical aspect of their lives harmonious.

Importance of a Shared Vision and Realistic Goals

Couples who share a vision of what a good life means to them are better able to stay focused on their values and beliefs about money, which gives them more clarity and conviction in their financial decisions. When financial decisions are goals-based, disputes over money are less likely. Couples should define and prioritize short—and long-term goals, including time frames for buying a home, starting a family, and other major life events.

Live by the Budget

Create a strict spending plan: For better or worse, the spending habits young couples form at the beginning of their marriage follow them throughout their lives. That’s why setting goals is essential. If they are meaningful and realistic, couples should create a spending plan for the purpose of achieving them. For many couples, that means finding a way to live beneath their means. Each dollar spent needs to be evaluated based on whether it gets them closer to their goals. It is also an easier way to hold themselves accountable. Without a purpose for each dollar spent, the tendency is to use it to simply pursue “more,’ which can detract you from your goals.

It’s Yours, Mine, and Our Money

For many couples, opening a joint checking account validates their financial union. While a joint checking account makes practical sense for managing certain aspects of a couple’s finances, it can also lead to problems if the finances become too centralized with one spouse. To avoid checkbook bickering over each other’s spending habits, each spouse should have their own checking account to control their personal expenses, assuming it is all a part of a joint spending plan.

Why Married Couples Need a Financial Coach

Considering that financial issues are the leading cause of marital problems, it’s safe to assume that many married couples fail to discuss money issues until they become significant problems. The problem is many couples don’t know how to address their financial issues. A good financial advisor is also a financial coach. An advisor can help couples establish clearly defined goals based on understanding their attitudes and beliefs about money. Once a couple’s priorities are in place, a financial advisor can keep them focused on the objective, which can prevent disagreements.

Develop a real plan for the future, with meaningful goals and a framework for making essential or difficult financial decisions. When a couple discovers their ambition for a good life together, it is much easier to agree on money issues.