It is hard to understate the importance of discussing finances openly and early with your life partner. Fighting over money is one of the top causes of divorce in 2019, second behind infidelity. High levels of debt and lack of communication over finances can contribute significantly to the stress and anxiety of an otherwise harmonious relationship.
In a number of marriages, “opposites” attracted each other. Financial incompatibility in couples is common. When this occurs, a saver and a spendthrift will have a hard time negotiating their approach towards money. It is important to communicate your expectations towards money management with each other regularly, clearly and unemotionally.
Having these conversations can help you determine your partner’s preferences in saving vs. spending. It is important not to assume your partner’s priorities will be the same as yours. Open communication is needed to review, negotiate and agree upon your financial priorities together.
Older couples suggest joining finances completely after marriage, but younger couples may feel more comfortable with slowly joining their finances, starting by testing the waters with a joint bank account. Many younger married couples who have lived and worked independently as adults before marriage choose to pay monthly expenses from a joint bank account, but keep separate accounts for discretionary spending. Either approach is fine, as long as couples are on the same page about how much they expect each other to contribute to household expenses and savings goals.
94 percent of married couples who describe their marriage as “great” say they regularly discuss their money aspirations with each other. Partners who have shared savings goals can work diligently to meet those goals and hold each other accountable; for example, encouraging each other to cook meals at home rather than eat out at restaurants, enjoy a free day at the park rather than paying for entertainment, or reduce shopping and online purchases.
To learn more about financial planning, please contact us at 515-557-1860 or email us at firstname.lastname@example.org. TABER Asset Management is a fiduciary, investment management and financial planning firm serving clients from across the U.S.