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Written By Andrew FiegaChFC, CLTC, Financial Advisor, Fiega Consulting
When couples first come to Fiega Consulting, I notice most of them spend more time planning their vacations than discussing their finances. Since the topic can be stressful, some spouses are reluctant to discuss it at all. No matter how long a couple has been together, bad financial habits can creep in to the relationship, but with healthy communication and planning, this could be fixed.
1. UNDERSTAND HOW MONEY AFFECTS YOU AS AN INDIVIDUAL.Most individuals bring financial beliefs and behaviors learned from their parents into a relationship. If one person’s family of origin had a lower income and basic necessities were scarce or unpredictable then it’s a possibility that person could view money as an extra layer of security when they’re older. The other person may have grown up in the opposite economic situation and may believe money will never run out and may be less anxious with spending habits. Once you understand your relationship with money it’s easier to work with your partner to move forward and create new financial behaviors together.
2. BOTH COUPLES NEED TO BE EQUALLY INVOLVED IN MANAGING HOUSEHOLD FINANCES.This could provide a clear understanding of what income is coming in and what money is going out. It also allows each spouse to be able to handle an unforeseen circumstance, such as a death or health emergency.
3. MAKE A BUDGET, REVIEW, REPEAT.So much about financial success is determined by daily spending and habits. In order to see what’s going out and areas that can easily get out of control, develop a budget. Online software can track spending and holds both people accountable. The software provides hard data, which helps eliminate finger pointing when each person thinks it’s the other person spending all the money. Aim to review, at minimum, every six months.
4. ADDRESS INDIVIDUAL’S NEEDSA couple’s goals are important, but each individual’s goals need to be addressed, too. If one person has anxiety about running out of money, then set a savings goal and agree to never dip funds below that number so that person feels more secure. If therapeutic shopping, sporting events or hobbies are important to one person, set a monthly budget that fits into your budget. A good financial advisor that you trust can help get both individuals working together toward agreed-upon goals.
This article was originally published in Kit magazine, May/June 2019.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.