Financial planning is essential for married couples to keep their finances stable and sound. Putting finances in order is not an easy undertaking, especially if the couple has different spending habits, different saving goals or different investing strategies in mind.
Daniel Smith, a renowned financial expert cited in The Marriage Medic, suggests, potential arguments over finances can be avoided by simply communicating, creating an understanding of expectations, setting objectives and agreeing on a financial roadmap.
Here are some great tips to help you ensure that your finances are in a healthy state while your relationship with your ‘significant other’ remains strong.
Treat Your Household like a Business
The more you apply sound business practices to your household, the more financially safe you and your family will be. First of all, try to assess and manage your household’s assets like stocks, bonds, cars, collectibles as well as liabilities such as mortgages, personal loans or car loans. Like any other business, your household has income, whether earned as salary or as dividends from investment activities. So, take into account all these vital elements and come up with a financial plan to ensure that the proper things are being done to run the household as a viable enterprise. Make the most of your financial resources to achieve your life goals.
Agree on a Common Financial Roadmap
As a married couple, you have to make time to discuss your finances and to decide on how your budget will be allocated to make ends and needs meet, what your short-term and long-term goals as well as investment movements will be and so on. In doing so, respect another’s values and find ways to compromise in how you will tackle your financial differences.
Stop Living Beyond Your Means
Living beyond your means can be a road to disaster. So, the key is to know the difference between what you need and what you want and single out what you truly need. Living within your means maintaining a balanced budget and spending efficiently.
First of all, estimate your income, then record and keep track of all of your expenses and compare your income to your expenditures. The next step requires you to categorise your purchases in relevant categories (e.g. essentials, eating out, entertainment, etc) and proceed to cut the non-necessities until your income is higher than your expenditures.
Adjust Your Perspective on Spending
Living within your means requires changing your frame of mind. Don’t bother keeping up with everyone around you because not only this will not ever make you happy, but you will also never make it to live within your means as you’ll be too busy trying to imitate an image that you can never afford to live up to. Instead, change your perception of what it means to be ‘rich’ and stop worrying about how others people perceive your wealth.
Realise that spending less money will not decrease your standing or quality of life. On the contrary, saving money and spending efficiently and focusing on non-material things such as love, sex, affection, children will give more meaning to your life.
Look for Utility Programmes and Welfare Benefits
Remember that every little saving on expenses adds up. Look for any government-sponsored utility or social welfare programs and benefits (e.g.: Housing benefits, Council tax benefit) that will help you economise. Most importantly, if you are living in the UK, you can take advantage of the Married Couple’s Allowance which could reduce your tax bill by £304 to £791.50 a year.
These are just a few common-sense tips to help married couples plant the seeds for a healthy marriage while maintaining a sound financial situation. All in all, having realistic expectations, making a feasible financial plan as well as retaining a sensible mindset on expenditure will help you put your finances in order and keep your relationship stable.