Financial Management for Couples
How to Manage Money and Create Financial Success in a Relationship
Sep 9, 2009
Living together in peace and harmony with varying spending and saving habits can be a challenge. If couples are willing to work as a team towards managing their finances they can create financial success in their relationship.
Financial Management
In order to have financial success in a relationship, it helps to first identify the current financial picture. Spend time as a couple exploring these questions.
- How is money spent? What percentage of income goes to household expenses, personal spending, joint spending, savings, retirement plans?
- What is the asset to debt ratio? Do assets outweigh debt or is debt on the incline? What are each partner's perspectives on credit, debt and savings?
- Who spends and who saves? Some people are spenders, some savers and some are a blend of both. Identify which one of you tends to spend more than save and vice versa.
How to Create Financial Success
Once all the pieces of the puzzle have been laid out, it's time to put them together into a new financial picture. Try these suggestions as a way to create financial success in your relationship.
- Define financial success. Having similar views on financial success is important. Explore whether this means balanced spending and saving, huge savings, or having passive income. Where are your views similar and different?
- Decide on a financial plan. After reviewing spending and saving habits, decide if any adjustments are needed in order to create a new financial picture. Is money being spent frivolously? Is debt increasing? Are bills being paid on time? Is any money going into savings? What needs to change in order to create financial success?
- Determine action steps. What steps need to be taken in order to create a new financial success picture? Does a certain amount of money need to be put into a savings account each month? Does debt need to be paid down? Decide who will be responsible for paying bills, putting money into savings, and how personal money will be divided.
Manage Money Spending and Saving
If both partners enjoy saving money, it's easy to create financial success, but if one or more partners tend to over spend, new habits need to be created. Try the following suggestions as a way to balance spending and saving.
- Do the opposite. If one partner is a spender while the other is a saver, try doing the opposite as a way to create financial balance. Have the spender practice saving while the saver spends.
- Identify underlying motives. People's financial habits are determined by underlying money beliefs. When these are brought to awareness, new beliefs and financial patterns can be created. What do you both need to believe in order to have financial success?
- Create a joint account system. Have a joint account that is used strictly for joint household bills. Determine how much needs to be deposited each week or month to cover monthly expenses and create a buffer for unexpected expenses. Create a file folder to track upcoming bills and bill payments as a way to stay organized.
- Be creative with saving. To make saving money more fun use pictures as a way to create motivation. Determine what to save for, such as travel, retirement, and education, then glue inspiring pictures that represent each of these onto boxes or jars and put a portion of income into these each day or week. When money accrues to a certain amount, transfer it into joint savings or investment accounts.
- Have fun with spending. In order to monitor spending while enjoying it, without guilt or regret, put aside a certain amount of money each day or week into a savings box or jar allocated for fun spending. At the end of each week or month, give yourself permission to spend the money on whatever you want. Then save up again for the next spending spree.
As couples create a financial management plan that works for both of them, allowing opportunities for both spending and saving, they reach financial success in a short amount of time.
For more information on identifying the source of money stress, read about couples with money problems.
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