So you’re married now! Congratulations! Now that the fun, exciting and thrill of the ceremony and honeymoon is over.
Now it’s down to business. Yes marriage is like a business! You have to manage it like a business contract when it comes to the finances. Marriage is not just a union of love but a union/joint venture that includes combining of financial assets. Managing your money together as one can be tricky but is serious. Your main goal when it comes to your finances should be to avoid the headaches and arguments over money.
Research completed on Divorcesource.com reports:
- According to a 2009 study by Jeffrey Dew at the Utah State University, one of the best indicators of marital discord is what he terms “financial disagreements.” Couples who “disagree about finances once a week” are over 30 percent more likely to get divorced than couples that report “disagreeing about finances a few times a month.” Disagreeing about finance means fighting about money.
- According to Dew, couples who disagree about money less than once per month run a 30 to 40 percent increase in the risk of divorce. This rate increases steeply when the partners fight several times per month, once a week, several times a week, to almost daily, when the risk increases to 125 percent to 160 percent.
- In his study, Dew examined the responses of 2,800 couples surveyed in 1987 by the National Survey of Families and Households, who were contacted again in 1992, “and asked if they were still married.” Of all the common items on the agenda of domestic disputes – chores, in-laws, spending time together, sex and money – “money disputes were the best harbinger of divorce.”
- Dew’s metric of percent of increase in the risk of divorce may be a bit murky, but fights about money carry a big price. People may fight about how to spend what they have, but more often couples wake up too late to the cost of high living, which is debt. In extreme cases, debt becomes like an unwelcome stranger in their marriage, and recriminations and bickering soon take a toll.
Financial responsibility should be a joint effort, in order make the best decision for the both of your financial future. Thus, keeping an open line of communication with your spouse, will keep love in your relationship, while worrying less about money!
When making the decisions about how money should be managed, you should consider who is the best at handling the family’s personal finances. There is no one size fits all when trying to make this critical decision finance decision for your new family. At this point, I would throw out the old fashion rule about the man is the one who handles all the finances! It is not wise to let the man ruin the finances if he is a fool with money, who does not know how the manage and control the finances.
Now this does not make him less of a man or define him. It actually defines him as a very smart man, if he understands that he is not the best fit as the money handler role of the marriage! But still make sure that you are equal partners to make sure the both of you understands your finances. For example, going over the bills and finances together. Talking to your spouse regularly and being open about developing a habit to set aside 25-35% of your incomes to save on a schedule.
Other things to consider: Be wary of a joint account if one of you has a poor credit history, trust and fairness concerns. Set clear boundaries on what you expect from one another, set a spending limit so that anything above that amount will need a joint decision before one buys.
You can divide the money up into yours, mines and ours. The shared account should be the account that bill payments come out of and the individual accounts should be for things that you individually want.
When you have a main earner; you can have the main earner pay an allowance to the spouse. The main earner can transfer an agreed amount to the spouse’s account each week or month. When this is done, do not look at this as a favor. If the spouse is a homemaker and looks after the children that is a job too!
Key’s Tips and Tricks to Remember
- Put money on the agenda
- Merge your lifestyles
- Set aside an emergency fund
- You have four options, when it comes to the income coming into you home:
- Pay an allowance
- Keep your money separate
By: Shynna Key – The Financial Fanatic
Financial & Business Contributor
Empowering You to Build Your Empire!