Valentine’s Day is of course an extremely popular day for marriage proposals. Regardless of which side of the engagement you’re on – or when your engagement occurred – consider how, when and where to wed not just each other, but also your finances.
Fights about money constitute one of the biggest frictions in marriage. While everyone sees financial well-being differently, you can minimize that potential friction many ways.
You would be surprised at how many people don’t discuss finances with life partners. While some simply prefer not to talk about money, others just don’t know how to go about it.
As with other parts of your relationship, keeping the financial lines of communication open is essential for success. An ongoing financial check-up appearing regularly on your calendar – weekly, weekly, monthly or even semi-annually – makes a great way to touch base on current money affairs. Call it your “financial roundtable.”
Sit down and discuss your financial situation, and identify short-term and long-term goals. Developing a clear understanding of where you are financially and where you want to be – in a month, in five years, anytime in the future – goes a long way toward ensuring that both of you work toward the same goals. Not to mention that it minimizes any miscommunication regarding everyday spending and saving.
Perhaps your idea of saving and your contributions to retirement plans and similar accounts differ from your partner’s. But putting a plan together on how to budget expenses and save for common goals reduces misunderstandings and, in turn, conflicts over money.
Creating a family budget (perhaps an eye-opening task for somebody who’s formerly single) starts with aggregating your incomes and writing down every possible expense, including savings and allowance for miscellaneous costs you don’t expect. Whether you allocate $10 or $1,000 to monthly savings as a start, the important thing is that you save and grow those contributions together.
Also, if you have big plans such as a (somebody else’s) wedding, a vacation or a new baby, you can create an additional savings account for that purpose. This allows you to avoid dipping into your core savings.
As you might soon learn from your new life mate, not everyone is born with a knack for managing finances. Even those who clearly understand what needs to be done regarding money are often too busy focusing on other important parts of life, such as making a living, taking care of kids, preserving good health or having a social life.
The good news: your financial advisor can offer technology that can help with personal finances, from mobile banking to organizing your cash flow. You no longer need to invest significant time and energy in understanding your current financial well-being.
Sure, it’s a lot easier to ignore your personal finances then tackle them head on. But as you plan to share your life with someone, set yourself up for success from the very beginning. The more you communicate and work for the same financial goals, the greater the chance for a happy union personally and financially.
Happy Valentine’s Day.