When couples get married or move in together, they naturally take shared responsibility for their money along with their lives. How to split finances becomes one of the most important and urgent matters to settle from the get-go. There is no one-size-fits-all rule when it comes to money management for couples. However, you can start by openly communicating with your partner about your shared finances. Here are financial tips for couples to get you started:
Effective Financial Tips for Couples
Talking about money can be quite awkward. It’s not something that comes up in a free-flowing conversation. However, you and your partner should be comfortable enough to discuss your finances.
Have a formal discussion about your finances and be prepared to put it all out there—your salary, debts, assets, and goals. Talk about your financial worries and spending habits.
It may take time before talking about money becomes more natural to both of you, but it’s a necessary move that can help set you in the right direction.
Understand Each Other’s Money Personality
The key to good financial health and marital bliss is knowing and understanding each other’s views and behavior towards money. If you know what to expect, you can make compromises, and there won’t be as many unpleasant surprises along the way. Discover your money personality as well as your partner’s.
Set Your Financial Goals Together
One of the most important financial tips for couples is talking about your financial goals. Identify what you want to achieve together and how you’ll get there.
Some considerations you must discuss with your partner:
- How to budget your daily household expenses
- Splitting of living expenses and bills
- Ways to pay off debts accumulated separately or together
- How to handle financial emergencies
- Saving and investment strategies
Find a Money Management Strategy that Works
Decide on a strategy for managing your money together based on your shared financial goals. Consider these five money strategies when exploring the way to share finances as a couple:
- Keeping your finances separately. This strategy is perfect for couples who want to maintain their financial autonomy. You can keep your money in separate bank accounts, instead of having a joint account. You can just split shared expenses either equally or based on the same percentage of your income.
- Combining finances completely. If you and your partner have the same spending habits, one of the many financial tips for couples you should consider is pooling your money in a joint account. You can use your combined income to build joint savings and pay all bills and utilities.
- Managing finances both jointly and separately. This may work for couples with about the same income and debts. You can share most of your household expenses AND still have separate incomes. You can have a joint account for shared expenses and individual bank accounts for personal expenses.
- Living off one income. It’s ideal for couples in which one person makes significantly more money than the other. The main income earner pays all for the expenses. He or she can keep separate accounts and only transfer allowance to his or her partner’s bank account for household expenses, personal expenses, or both.
- Living off a spouse’s income and saving the other’s income. Couples who both earn money, with one having a well-paying job and the other having irregular income may want to try this strategy. The income of the partner with a more stable job can be used for household expenses, while the income of the spouse who earns inconsistently can be saved. It’s an effective way to keep household expenses low and increase your financial goals as a couple sooner.
Create a Budget Plan
A budget plan can help you stay on top of your expenses. Designate an amount you can spend for goods, take outs, entertainment, and personal expenses. Include your bills, other debt obligations, irregular expenses, and money for your emergency fund in the budget plan. This is one of the best financial tips for couples who want to be on top of their expenses.
Then, review your joint expenses over the last months to determine how much you have spent and whether you need to cut down on your spending. Don’t worry if you need to adjust your budget during the first few months, but you’ll get the hang of it eventually.
Use a Money Management App for Couples
Numerous mobile apps are made specifically for couples who want to manage their finances better. Some of the best budget apps to consider are:
- Monefy – allows tracking expenses on multiple devices using your Google Drive or Dropbox account.
- Honeydue -has interesting features, like sending a thumbs up to encourage your partner’s good spending habits, along with standard features such as bills payment reminders and setting monthly household spending limits.
- HomeBudget – enables tracking recurring bills and due dates by multiple users in the household.
- Splitwise – a simple way to manage shared expenses not just for couples but also families, housemates, and friends.
Don’t Keep Secrets
One of the most important financial tips for couples anyone can give is not hiding any financial secret from your partner. Don’t start your marital or cohabiting life on the wrong foot. Be as honest as possible about your finances, no matter how uncomfortable it might be. Discuss outstanding debts, income sources, investments, and other financial assets and liabilities.
Identify Needs Vs. Wants
Sit down with your partner and determine your needs and wants as a couple. This is one of the best financial tips for couples you should consider to determine both of your priorities.
Make sure that you both agree on what you can and can’t live without. Compromises are important in any relationship. If the other person isn’t fully on-board, discuss why and how you can create a middle ground.
Of course, don’t just focus on your needs. Allot of a small amount to treat yourselves. Set aside a small amount for things you want to buy, but don’t go overboard. Remember: you also deserve to (responsibly) enjoy what you earn!
Maximize Your Benefits
Know each other’s company-sponsored benefits, (e.g., HMO and benefits for dependents), government-mandated benefits (e.g., PhilHealth and SSS maternity benefits), and life insurance policies. Discuss how you can maximize them to save money when one of you gets hospitalized. Make sure to enroll each other (and future kids) as dependents, if possible.
Discuss Job Security
Because of the pandemic, about 45% of adult workers lost their jobs. Being unemployed in a time of uncertainty is stressful and can negatively affect your finances. Talk with your partner about how you are going to handle your household finances should one of you loses income, and the other does not.
Create a financial blueprint, outlining what you and your partner would do. Discuss how you can cut back on expenses for the meantime and what plans involving money can be delayed. While no one wants to lose their job, it’s still best to be prepared should it happen.
Decide If You’re Financially Ready to Have Kids
Raising children is fulfilling but can also drain your finances. Giving birth can cost you up to more than PHP 100,000 already. You also have to prepare for your kids’ living expenses, medical needs, and education.
Discuss with your partner about having kids—whether you can afford to have one or not right now. If you decide to have one, make the necessary financial preparations for a baby in the future. This is one of the best financial tips for couples who are planning to start a family soon.
Establish an Emergency Fund
Build an emergency fund for unexpected events such as losing your job, your car breaking down, or a trip to the hospital. Experts suggest saving three to six months’ worth of living expenses. This is one of the best financial tips for couples who have don’t have stable sources of income.
Apart from household expenses, consider debts and other loans you are still paying when setting an amount for your emergency fund. In addition, make sure your emergency fund is easily accessible by both of you. Why not keep it in a joint savings bank account where it can grow?
Review Your Finances Regularly
Discuss your budget, income, and spending at least once a month. Talk about how your budget looks like and if your money management system is helping you achieve your financial goals as a couple.
These meetings can help you know where you stand financially and identify what you can do to improve your finances. Reviewing your finances can also help strengthen your communication and trust level, knowing that you got each other’s back.
Work as a Team
Stress and tension arise when one partner, who is earning more than the other, tries to control spending decisions, causing the other partner to feel resentful and self-pity. It’s one of the most important financial tips for couples, anyone should consider. Your spouse isn’t your enemy–they are your partner through thick or thin.
As a couple, it’s important to work together as a team. Instead of bickering over money, always encourage and build each other up. Be mature enough to check your ego, too. It’s easier to resolve differences that way.
These financial tips for couples aren’t the end-all-and-be-all of money management. No matter how well you manage your finances together, you may still face a few hurdles along the way—some of which are beyond your control. What matters is how you deal with negative experiences as a couple.
-  Adult unemployment reaches record-high 45.5% in July — SWS (Esguerra, Inquirer, 2020)
-  Here’s how much you need to save per paycheck to build a 3-month emergency fund in 2020 (Hecht, CNBC, 2020)
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