Couples who are either just married or have been in a long-term relationship often make financial mistakes when deciding what to do with their money. If this sounds like you, keep reading to learn more about what you and your partner can do about it.
5 Financial Mistakes
1. Not Making a Budget
It may sound like a tired refrain, but “make a budget” is still an important phrase for any household. Why? Because it provides a breakdown for you and your partner as to how much income you are bringing in, what your expenses are as a couple, and what your assets are.
Solution: Use online tools to create your own budget and stick to it. If you think changes need to be made, make sure both of you communicate together and agree before making any adjustments.
2. Not Making a Long-Term Plan
When you are single, it’s easier to live in the moment. However, when you form a relationship with a partner, you are making a long-term commitment. A long-term commitment means making plans for the future. For example:
- Retirement
- Emergencies
- Children
- College tuition.
- Paying off a mortgage or loan.
Solution: Consult with a financial planner to help set up these plans and ensure your family is ready for the future.
3. Not Dealing with Your Debt
A third mistake couples make is not addressing preexisting debt or getting more into debt. For example:
- College loans
- Car payments
- Credit card debt
Perhaps the biggest financial hurdle that you can face as a couple is consumer debt. According to Bloomberg, the average American has $16,000 in credit card debt. Yikes!
Solution: Work with a financial advisor to address credit card debt, make a consolidation, and create a monthly budget.
4. Deciding Whether to Share Accounts
A big mistake couples make is not answering the question: Do we have joint or separate accounts? This can be especially difficult if both partners have had their own accounts for a long time, such as bank accounts, savings accounts, or other financial tools. However, it is in your best interest to settle this question, especially since it’s important for deciding who pays which bills and how that is accomplished.
Solution: Sit down as a couple and review your accounts and decide what is best for your situation. Many couples share everything, while some have a joint account for household expenses and have separate accounts for personal spending.
5. Not Communicating
If you are not communicating with your partner about finances then you are both putting your financial and personal relationship in jeopardy. A common reason why relationships end is because of disagreements over financial matters.
Solution: Have regular discussions together about finances. Break these discussions up into smaller topics to make it less overwhelming. Agree to have action steps for each partner after the talk.
What If We’re Still Making Financial Mistakes?
If you find yourselves still struggling to get on the same page, consider working with a counselor familiar with the financial issues couples face. A counselor can help by being a guide while also teaching communication skills that can help you as couple discuss not only the finances, but other areas of your life as well.
Don’t let your financial future as a couple be put at risk due to poor planning and communication. Take the steps necessary to make a budget, create future plans, and share these ideas with each other. If necessary, work with a financial counselor to better address these issues. That way, you can both be comfortable knowing that you have done all you can to avoid financial mistakes.
Denise Kautzer is a Licensed Professional Clinical Counselor and a Certified Public Accountant whose practice is located in St. Paul, MN. You can view her website at www.denisekautzer.com or contact her at denise@denisekautzer.com