Love and Money: How to Manage Finances Equally
Money is a leading cause of divorce and marriage counseling. How can couples avoid letting money ruin their love?
The answer – communication. When you say, “I do,” you unite more than just your families – your finances are now intertwined as well. While there is no ‘one size fits all’ approach to managing finances, a relationship benefits from open and honest conversations on debt, savings goals and budgeting plans.
Whether this is your first conversation about money or their hundredth, here are the top three intertwined financial topics to discuss to better manage your finances together:
Commingling Credit: Once you’re married, your credit score no longer stands alone. Be honest about existing debt, from the beginning, so there are no surprises down the road.
Drafting a Budget Together: Lay out your joint income and expenses – both combined and separate. Once the two of you have a realistic idea of your cash flow, work together to create a monthly budget that works for both of you.
Planning for the Future: Be honest about your long-term financial goals. If you want to retire to a secluded log cabin in the mountains or travel the world with your significant other, communicate those dreams so that you can prepare for the future together.
Whether it’s coming up with an investment strategy, a debt payoff plan or a monthly budgeting approach, the most important thing is that you are doing it together. If making an effective plan feels like tricky terrain, give us a call. Your wealth manager can help you and your partner clarify your goals and get on the right track together. Communication is key. From there, it’s about managing your money as a team.