The 3 Biggest Financial Mistakes Many Couples Make
Merging money and love is tricky. It may come as no surprise that money is often listed as one of the top reasons couples divorce. So how exactly are you and your honey supposed to get on the same page financially? Start by avoiding these 3 common financial mistakes, and you’ll be well on your way to wedded bliss (or at the very least your fights won’t involve your bank account).
Mistake #1: Not discussing your financial pasts
The time to talk about your financial histories is actually before you move in together or decide to walk down the aisle. It’s crucial to know if your partner has debt and discuss how they plan to pay it back. Any debt your partner carries has the potential to affect your household. You should also review your credit reports and scores together. You can learn more about how to review and improve your scores by reading our past post.
It’s important to have an open honest conversation about any financial mistakes in your past. If your partner is not willing to do the same, this could be a huge red flag.
Mistake #2: Not understanding each other’s spending personalities
Most money arguments between couples have to do with different ways of managing and spending money. Conflict happens when one partner is more of a spender and the other partner is more of a saver. You and your honey can take a money personality quiz here to see how you match up.
Once you have an understanding of each other’s spending habits, sit down and review your current financial situation together.
Answer these 3 questions:
– How much money do we have left to spend each month once our monthly bills are paid?
– How much debt do we have outside of our mortgage?
– How much money do we have saved for emergencies and long term goals?
Remember to keep an open mind and listen to each other. Don’t just assume because you save more money that you are in the right. It’s about finding the balance between enjoying life now while still setting something aside for the future.
Mistake #3: Failing to plan your financial future together
It’s important for couples to have shared financial goals for the future and to revisit those goals at least once or twice a year. Start by having a general conversation about how you each envision your ideal financial life. Ask each other these questions to get the dialogue started:
– How much money do you need to have saved to feel secure?
– If you were given a $10,000 bonus, how would you spend the extra money?
– At what age would you like to retire, and how would you like to spend your retirement?
Use your answers to these questions to start building financial goals both short term and long term. It might be hard to know how much savings you’ll need to retire by a certain age. A financial planner can help you clarify your goals and make a specific plan to reach them.
Discussing your finances can be difficult and even intimidating, but the effort is worth it. It may be scary the first few times you broach the topic, but it will get easier and easier. My husband and I like to refer to our financial chats as “money dates” where we set aside a specific time on Saturday mornings to sip coffee and review our budget. The financial peace of mind these conversations bring is priceless. So now’s the time to ask your partner when they would like to schedule your first money date!