Monday, March 06, 2017

Marriage and Money Management

One of the most difficult things to agree on in a relationship is how to manage the finances. In most relationships one person is responsible for budgeting and paying the bills on time. Blended families have a more complex system with additional burdens of child support, alimony, and future college bills to consider. Louis Scatigna author of The Financial Physician believes that couples should manage their money together. He states that the best option is for the couple to sit down monthly to discuss bills, savings and investment options before writing the checks.  Sharing the financial burden will help the couple shift from “adversaries to teammates who can strategize, motivate, and hold each other accountable” for the spending.

Work together to set goals

A couple that establishes a routine to pay their financial responsibilities together has the advantage to set realistic goals together. Unrealistic expectations can create conflict or make a partner feel like their goals are being sabotaged. The couple should create goals they are both motivated to accomplish. This can be a savings account, family vacation or to purchase larger items like an automobile. If one person is controlling the finances it can create a parent-child dynamic. Kansas State University’s Institute of Personal Financial Planning Kristy Archuleta says, “to rebalance, the parent character has to cede an equal amount of power and responsibility to the child in the relationship, so that they are both acting more like adults together.”

Each couple should have an established dollar amount that they are allowed to spend without consulting their partner.  This can allow the individual to purchase items that are important to them without creating conflict with the partner. Dr. Scott Haltzman author of The Secrets of Happy Families says, “Successful relationships are based on the establishment of trust, and a spend-first/apologize-later strategy feels like a betrayal.” Couples could also create their own accounts for discretionary spending for those purchases that are separate from family goals.

Want or need

When raising a family there always seems to more needs than there is money available. We need to learn how to break the cycle of spending beyond our means of income.  “The people who really have the financial lives they want understand themselves on the inside first,” says Brent Kessel author of It’s Not About the Money. First ask yourself why you want the item. Determine if it is a “want or need”. If it is an impulsive purchase Kessel suggests you ask yourself why you want the item.  Then let the impulse pass so that you avoid creating any feelings of remorse or grief. Learning to establish financial boundaries and maintain your long term financial goals will help maintain a healthy marriage.