The union of two people in marriage holds the promise of a life of happiness; however, the fact that it is also a financial union eludes many couples until money issues come to the forefront. Depending on when and how they are addressed, these issues can be the cause of marital strife and they are also one of the leading causes of divorce. It's not uncommon for serious money issues to sit on the backburner until couples have a chance to enjoy the wonderment of their young marriage. Then, when issues do arise, there is no strategy in place to guide them, no agreement on values or beliefs to bind them, and, in many cases, no way to keep emotions from overwhelming them.
Nothing short of a prenuptial financial plan can prevent the inevitable conflicts inherent in money issues. The emphasis of such a plan should be placed on a thorough discussion and, ultimately, agreement on shared values, beliefs, purpose, and how they define happiness, which will form the backbone of all of their financial decisions. Before tying the knot (or at soonest possible opportunity thereafter), couples must be able to develop a shared mindset about money. Once they are joined in the way they think about money, they can move on to some practical strategies that will keep them enjoying their marital bliss.
The Money is Yours, Mine and Ours
One of the first money moves many newlyweds make is to merge their bank accounts into one joint account. However, when managing all aspects of money from one joint account, suddenly all of the control and management of money are centralized, often with one of the spouses taking control. While it's an effective way to manage the household cash flow, nothing causes more bickering than the strict oversight of each other's spending habits. We are individuals before we are couples, and we all need to be able to exert some individual control over something that belongs just to each of us. That's why most marriage counselors recommend that couples establish individual checking and savings accounts that allow them to manage a portion of their own, personal expenses.
The Debt is also Yours, Mine and Ours
In many cases, a financial union also involves the union of debt. The problems arise when the debt comes primarily from one side of the union; and, an even bigger problem arises when someone fails to disclose the nature or size of his or her debt. The best way to start a financial union is debt-free - a worthy goal to work towards as a precondition of marriage. After marriage, paying down debt, regardless of its origins, should be a shared goal.
Establish a Strict Spending Plan
We all know the theme - a couple bickering over a revelation that one or the other has purchased something totally impractical without the other's knowledge. Many couples might be able to get beyond the anger over the occasional impulse purchase or overspending on budgeted items; however, it's when it occurs nearly every day, in small, almost undetectable pieces that can send couples over both the emotional and financial edge. The most important thing a couple can do is to agree on spending limits in all budget categories, which should include an amount for each spouse to spend as they wish each month. Critical to establishing a realistic spending plan is to build it around a clearly defined savings goal - setting aside the targeted amount of savings each month before any spending occurs.
Prepare for the unexpected
Nothing can disrupt the best laid plans more quickly, and often more devastatingly, than the unexpected. It happens to each of us; so, that means, for married couples it can happen twice as much. The failure to expect the unexpected - medical emergencies, accidents, job loss, natural disasters, etc - inevitably leads to financial trouble. The very first savings goal a married couple should target is to establish a cash reserve emergency fund that could fund 12 months of living expenses if needed. Equally important is to purchase the right amount of insurance coverage for their property, their incomes, and their lives.
Keep Secrets at Your Peril
There is nothing more damaging to a marriage than deceit, romantic or otherwise. Financial deceit - keeping secrets from each other over debt issues, spending issues, gambling problems, or just about anything to do with money - is a landmine that will inevitably explode. Many secrets start out small and harmless; however, they tend to compound and expand into a more complicated web of deception. Couples need to make regular communication about money a top priority, making quality time available for planning, problem solving, and support.
Couples at any stage of marriage can avoid the painful experience of fighting over finances by openly discussing their views on money and the values that will drive their decisions. Only then can they do the more important work of planning for their financial security and managing their money for financial success.
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