When it comes to talking openly about our finances, there can be all kinds of reactions and responses. In many countries, the topic of money can be seen as rude, bad taste or almost taboo – even amongst friends and family members.
If we don’t have much money, we might feel shame or insecurity or that we’ll get judged when being asked about it.
And if we have a lot, we might also feel embarrassed, because it seems like we are showing off or trying to exhibit power.
Some find the sharing of numbers plain disgusting, while research has shown that people are actually more comfortable talking to strangers about things like sex and STDs than they are about money.
Seems ridiculous, right?
Whatever the reasons for it, avoiding conversations about money in a marriage or partnership can be devastating.
Research has shown that arguments over money amongst couples can cause stress in the relationship and are often the catalyst for a high number of divorces. Common points of disagreement include:
- Major purchases
- Big investment decisions
- Children’s education
- Partner’s spending habits
- Not earning enough
But the happiest couples know how to communicate with each other and work through their differences and this applies to your finances too.
Money doesn’t have to be a wedge in your relationship!
When it comes to managing your household finances, there are several habits that happy couple have that help them to to avoid clashes over money.
Habit #1: They share financial responsibility
Happy couples act as a team and the first step of being a team is to merge your finances. This means that all income assets are treated as “yours, mine and ours” and all debt is treated the same way.
The second part is the task responsibility.
All too often, financial tasks are not divided in marriages and one partner is left to handle everything (consciously or unconsciously) without the other ever really getting involved. This is not a good habit. Share roles and regularly discuss the household finances. It’s okay if one of you is better at the day-to-day finances than the other, so if one does take the lead, make sure the other is kept in the loop.
Look at short term goals and your income versus expenditure and your total net worth every month or every quarter.
Habit #2: They make money a priority
Talking about financial goals (with or without a financial adviser) and keeping everything clear and open is the best way to operate.
Make sure that you understand each other’s background in money and current point of view, hopes and fears. Who is a spender and who is a saver? Who prefers instant gratification and who can wait until you can afford it? What did your parents teach you about handling finances and the value of money?
While you and your partner may well share a great deal of common ground, it should not be taken as a given that this applies to the finances.
Knowing each other better in a financial sense will go along way towards avoiding conflict in the future.
Habit # 3: They talk and keep each other updated
Knowing and understanding your partner’s views on money is the first step. The next step is to ensure that you keep each other updated on income changes, spending, looming expenses and anything else that can have impact on your finances – positive or negative.
Being kept in the dark can lead to unwanted surprises and resentment. If everything is transparent and in the open, you can work through the management of your money as a team.
Habit #4: They set spending limits
Happy couples plan and have an emergency fund. The feeling of financial insecurity can be damaging to a relationship and so having a security blanket Is important. But they also have balance in their financial lives and are not complete frugal all the time. They set aside some money for fun in the short term, as well as thinking about the long-term.
Keep a track of your finances and know exactly where your money is going each month. If it’s all on a spreadsheet, it makes it much easier to view and discuss objectively. There are some great apps you can use to track your income and expenditure. You could also try our free template by clicking below.
Habit #5: They have joint bank accounts
Happier couples tend to have a joint bank account that covers the basic monthly expenditures, such as the mortgage, groceries, utilities and personal necessities, etc. This helps to maintain an openness and transparency when it comes to money.
There is nothing wrong with having individual accounts as well, but make sure the activity in this accounts disclosed in your regular ‘household finance meetings’.
If you can cover some or all of these, then you will find that money talk in your house becomes less stressful and less likely to cause arguments.
Always remember that when it comes to communicating about your finances, you should try not to become emotional.
Stay calm and objective.
Treat your household finances like a business and if you decide as a couple that you are not happy with the way the business is running, then agree to implement changes.
But always make these decisions together, as a unit – as a financial team.
And that’s the money habits of happy couples all sussed!