If you tend to operate more on the frugal side of things when it comes to finances, and your spouse tends to be more lavish, it can be challenging to get on the same page with budgeting, spending and family finances. Think about the following advice to keep communications flowing.
- remember you are a team
- remind your spouse about retirement
- start with goals
- put it in black and white
- make it easy
- leave good judgment at the altar
- ignore the unpleasant
- think that credit history, reports and scores become “one” when married
- be anything other than honest
- forget about the kids
It is important to remember that all heads of household should understand their financial situation. Work together with your partner to create a budget outlining all income and expenses.
Most couples look forward to retirement – or at least having more time to do the things they’d like to do. That means thinking about how you’d like to spend that time and then preparing for it accordingly. Retirement savings is a challenge for anyone, but each person must put aside a portion of her income for retirement. Invest the maximum in a company 401(k) plan if it is available, as well as an Individual Retirement Account (IRA). If self-employed, work with an accountant or financial planner to determine the best retirement plan(s) for you and your spouse.
The key to good budgeting is to set goals with your spouse (and family members as appropriate). Maybe your goals include taking a family vacation to Europe or having time to train for a 10K. Whatever they are, write down the goals and then build the budget around them. It will be easier for your spouse to tie those desired goals to the reality of needed money to achieve them.
Keep receipts and a spending journal or log. Most people are surprised to find just how much they spend each day on small items. Writing it down – just as writing down everything you eat when you are watching your weight – may open your spouse’s (and your) eyes to your real spending patterns.
Budgeting and managing finances need not be complex. While computer programs are available (many free), an Excel spreadsheet or pencil and paper can work just as well. Choose what works best for you and is most comfortable.
Then, establish simple systems. Make it a habit to deposit any cash or checks as they are received. Open all mail – including every bill – as soon as it arrives, and then pay each bill immediately upon opening – or use a bill-paying filing system. That “system” may be a folder that resides in a certain spot both of you can check and access, a basket on the kitchen counter or an online calendar. Choose what works best for you and then use it religiously.
Spouses should not hand over all financial decision-making to partners. They also should know about their own and their spouse’s credit history prior to, and during, marriage. Married partners are wise to always keep a credit card in their own names, and maintain a good history on those cards.
Included in discussions on finances must be insurance and planning should something happen to your spouse or you. Stay-at-home parents, in particular, sometimes do not consider life insurance, but a working parent would likely need to replace his or her income to care for the family. The loss of a stay-at-home parent would create a need for additional child care, and possibly counseling and other expenses. When a spouse thinks about the importance of protecting the family and his/her assets, it then becomes a little easier to discuss life insurance, a will, and provision to care for any young children.
Some spouses ignore discussing these things because they think that married couples share credit reports and scores. Wrong! Each person is responsible for checking his/her own reports at least once a year.
Remind your spouse that honesty really is the best policy. Honesty allows each person to address any money problems head on. Do not hide purchases or debt problems. These behaviors just dig a deeper hole.
Unless you are knowledgeable about your own budgeting, income, expenses, debt and other family finances, it is very hard to teach children how to be financially responsible. Spouses who are reluctant to discuss finances and budgeting might become less so when they realize how important it is for their children. Being a good role model for your kids is the best financial lesson every parent can provide.
Couples often assign one spouse to take the helm when it comes to home finances and budgets. But this can be a recipe for disaster. It is more important than ever for spouses to work together, stay informed and build a strong future for themselves and those they care about.