Marriage can be exciting as well as stressful. Much of this stress often arises from financial bumps along the road. However, there is something you can do about it. You and your loved one can alleviate some of this stress by discussing financial matters and working together to come up with a solid financial plan.
Here are a few of the biggest mistakes you and your new spouse should avoid when it comes to managing your finances.
1. Not discussing finances regularly
Communication is vital for a productive marriage. Make sure you and your spouse sit down at least quarterly to discuss household finances. Go over your budget as well as any future major purchases. When you don’t meet regularly to review how much money is coming and going, it can lead to confusion and overspending. You can get ahead of any potential misunderstandings by speaking openly about your family finances.
“When communication between you and your partner is broken, you leave to chance the effect money has on your marriage. And it usually doesn’t settle into a good place on its own. However, when you deposit the right kind of effort in your relationship, the results you experience will improve. Simply put, when you change what goes into the money conversations, what comes out will change too,” said Derek and Carrie Olsen in One Bed, One Bank Account: Better Conversations on Money and Marriage.
2. Keeping financial secrets
Do you have significant credit card debt, a defaulted student loan, or some other money secret? It’s time to come clean. Financial secrets can ruin a perfectly good marriage. Arrange to meet with your spouse so that you can discuss your financial infidelity. Unfortunately, keeping financial secrets is not uncommon. Approximately 1 in 5 Americans are hiding debt from their partners and 1 in 6 admit to having a financial secret, according to a study by life insurance agency Haven Life.
If you haven’t tied the knot yet, reveal your situation before taking a trip down the aisle. If this proves to be a deal breaker, you were probably better off not getting married in the first place.
“[Couples] tell me that money fights ruin their sex lives and cause resentment. Most of them admit that they prefer to keep their spending and saving habits private from their partner — essentially confessing they’d rather deceive a loved one than work through a conflict about money. For these couples, talking about money triggers a cascade of emotional issues that, if ignored, will gradually destroy trust and intimacy — and if untreated, will ultimately destroy their relationship,” said relationship and marriage counselor Bonnie Eaker Weil, Ph.D., in Financial Infidelity: Seven Steps to Conquering the #1 Relationship Wrecker.
3. Not hiring a financial planner
Newlyweds can benefit from hiring a financial professional to assist them with the often overwhelming task of merging finances. You can start your search on the web through the Certified Financial Planner Board of Standards online directory. It’s not always a good idea to try to figure things out on the fly, especially if neither of you is savvy about financial management.
“…If you marry someone with good money management skills and a sound approach to saving and investing, your chances for having a balanced budget and building a healthy nest egg during the course of your marriage are very good. If, on the other hand, you marry someone with far more liabilities than assets, you could end up losing your shirt to your spouse’s creditors unless you are careful,” said Nihara K. Choudhri in What to Do Before “I Do.”