5 Money Mistakes That Will Ruin Your Marriage
When you enter into a marriage, you are agreeing to unify your lives as well as your finances. Marriage is an exciting time in one’s life, but it can also be very challenging.
Sometimes your “pre-married” spending ways can carry into your marriage causing unwanted confrontation. Arguments about money are a leading cause of divorce – and not necessarily because of actual financial troubles, but rather a lack of proper communication about spending habits and saving. Here are 5 common marriage and money mistakes and tips on how to avoid them.
Mistake #1: Handing over control of your finances to your partner
Trust is an important part of a marriage, especially when it comes to your finances. It is very common for one partner to have complete control and for the other to not think twice about money coming in and where it is going. This can be a big mistake.
God forbid you ever divorce, you want to be prepared and know what your financial landscape looks like, be aware of all accounts and loans, and know where your credit score stands. Try and keep the lines of communication open and have regular catch-up sessions. Keep an eye on your bank accounts and consider reassessing your budget every 6 months.
Mistake #2: Not talking about your financial goals
It is so important to understand the life you and your partner envision for yourselves. Do you want to retire early? Travel? Have one parent stay at home to raise your children? Have a second home? These are all important factors to consider when planning a life together and you want to make sure you are both on the same page. Your goals and finances should run on parallel tracks. Having these goals in mind will help you immensely when planning your budget.
Mistake #3: Not being aware of your spouse’s debt
While you are not legally responsible for any of your partner’s debt that was acquired before the marriage, it could be naïve to think that their debt will not affect you. Don’t make the mistake of ignoring your spouse’s debt.
If your spouse has a poor credit score then it can affect your ability to secure a mortgage or loan. If he or she has $90,000 in student loans or loads of unpaid credit cards, then it will certainly affect your monthly budget. It is important to be aware of each other’s debt history and come up with a plan to pay down debts as quickly as possible so you can move on to planning and saving for the next stages in life. Mutual financial disclosure is crucial in a relationship.
Mistake #4: Not making your budget work for both of you
A budget is an important tool that will help you determine what is most important to you and help you prioritize where you want to spend your money. Not budgeting for two parties can be a big mistake in your relationship. First, sit down and go over your monthly income and aim to put away at least 10% towards savings, depending on your long-term savings goals. Then, go over your fixed expenses like mortgage, car loan, etc. as well as variable expenses like utilities, groceries, and cell phone bill. It is likely that you will need to compromise on some things in order to ensure the budget works for both of you.
Mistake #5: Committing Financial Infidelity
There should be no secrets when it comes to finances in a marriage. Secret spending or hiding things like a Christmas bonus from your partner can be a sign of trust issues and a larger problem at hand. If you’re hiding purchases, credit cards, or extra income in your marriage, it can only hurt your relationship. While there is no need to consult with your spouse every time you pull out your wallet, it is important you both respect the budget you have set for yourselves. It is also wise to have a spending limit (i.e. $200) for purchases that can’t be made without consulting one another. That way one of you doesn’t make an impulse buy on a new iPad you had to have, which is sure to lead to an argument.
Most marriages don’t have money problems, they simply have communication problems when it comes to money. Avoid making your marriage more complicated than it needs to be by working together towards your shared financial goals. How do you and your spouse tackles finances?