Folake has been so eager about getting married, but little did she know about the perks of finance in her marriage. She had no idea that merging wants, needs and desires in marriage could be a great challenge. Few months down the married zone; she and her husband had been involved in numerous fights, which solely revolved around money. So while she was prudent, her husband on the other hand was a terrible spender; then the once fairy tale romance is fast turning into a nightmare.
Which brings us to the topic of the day, ‘Financial Management in Marriage’.
It’s been revealed that Finance can be the number one cause of marital strains. It’s understandable that financial struggles can cause discord between people and their mode of spending money, but the truth is, its never just about the money — The way an individual handles finance reveals a lot about what they value most; it reveals deeper character issues and state of priorities.
In this little personal finance episode we will be providing great ideas to help you and your spouse make your marriage stronger by tackling the issue of money management/finance in marriage.
First let’s ask ourselves this questions…
Do happily married couples always agree on financial management techniques or decisions? Do happily married couples ever have arguments over finances? Does the level of financial agreement relate to the couples ability to manage conflict in general?
In reality discussing financial matters, spending and saving decisions also cause tension in marriages, it may sound untrue but it does happen, planning it out alone is lot of stress on people. Luckily, couples who go against all odds and make this practical decisions regarding finance or money spending are more likely to be happily married.
• Understand the Blue Print: First, let’s understand Finance in marriage. Finance plays a major role in the life of married couples and issues around money affect marital happiness. As such, financial problems do not have to be as severe as a job loss of the breadwinner (husband) or a couple facing poverty to affect marital happiness; Simple day-to-day tasks such as deciding what to spend money on or whether or not to save can have significant impacts on the health of a marriage.
• Discuss your unified Financial Goals and set priorities: Discuss your future goals, both short term and long term. Think about the necessary cost of acquiring a house if you are still renting. Think of the education savings for your children and your further study requirements. You should involve leisure and vacations in your plans as these helps to create an atmosphere for discussion which will eradicate problems in your relationships. To discuss the future, you will require a clear and good understanding of each other’s financial philosophies and goals or financial decisions.
• Constraint Budget: People often contemplate if Budgeting should ever be involved in a home, they ask; ‘Is it of any importance to budget for home operations?’ Yes, it is essential for couples to set a budget for home operations and utilities. It is a reckoned financial statement that covers a defined period of time. It will normally include planned or anticipated incomes, expenditures, cost of assets, liabilities and associated cash flows.” Most people are aware of the importance of having a budget, but rarely use it to manage their personal finances. Setting up a budget will not take a lot of time, but is a tremendous tool in helping you manage your finances at home and elsewhere. Both partners in a relationship must be aware of the overall financial situation. I suggest couples have monthly meetings to discuss their plans, finances and keep files regarding investments, accounts and insurance.
• Plan for Emergencies: Nobody expects an emergency or disaster especially one that affects them, their beloved ones or their homes; yet the simple truth is that emergencies and disasters can strike anyone, at anytime, and anywhere when you least expect it. So, not planning for emergencies is another very big common financial mistake people do. Emergencies will cause emotional stress and frustration. Therefore, try to avoid adding financial strains on top of other requirements by planning for emergencies and the best way is to prepare to respond to an emergency before it happens. Few people can think clearly and logically in a crisis, so it is important to do so in advance, when you have time I strongly suggest you set up an emergency fund and have sufficient cash in there to cover emergencies. You may even prepare an emergency supply kit to keep your family and make it self-sufficient for a good period of time.
• Avoid money secrets: There’s the story of a couple, where the wife had much more money than the husband but she would not help with the home operations to an extent that she could opt getting things on credit for the husband to pay so she won’t have to pay a single penny from her income. She made her husband believe she did not have any money. But unfortunately for her, she became so ill and getting scared of the uncertainty, she revealed to the husband the many commercial houses she has and many other businesses. You definitely can imagine how the husband felt; this could cause a situation of mistrust in the relationship. Try to avoid any money secrets from your spouse because this can almost lead to a marriage break up. You ought to be honest and truthful and share your life together with your spouse. In case of anything, your spouse may be the person available to defend your property. Actually many people have lost property in the process of making things a secret. But really unless when you are planning for a divorce, which in my opinion is not proper for the married couples, why should you hide your finances from your spouse? It just doesn’t make sense.
• Communication: Communication is essential to a successful marriage and lack of communication may even contribute to separation. It is important to other areas as it is to money issues. The cause of many money problems is often due to communication failure. You are unlikely to be able to deal with money problems unless you can both discuss your finances and your feelings about them. I prefer open communication and do not point fingers or blame. Communicating about your finances is just as important as communicating about any other issue in your relationship. If there is something you are not happy with, just discuss it with your partner. Discussing about how money should be spent is one of the unromantic things many couples can ever think of but I think it is important. It may look unromantic at the start but you will later find it pleasant and promotes peace of mind.
• Assigning Control: It is important that both partners are equally involved in finances and decision making on issues pertaining to their relationship. It is not proper to take things for granted and leave one person to be in charge of all the finances, although that person may be capable and willing to be in control. It is beneficial for both of you to get involved in the finances because if both of are aware of your financial situation as a couple, you can plan better and make better decisions.
• Examine your Insurance coverage: Consider risk management for your family. Most couples do not have insurance coverage for their property or life. It is good to have insurance for at least a few of your properties like cars, houses etc. Insurance is a form of risk management where the insured transfers part or whole of the risk to the insurer. But before you take any insurance cover, it is proper to take some time and discuss it with your partner to be on the same page.