Love & Money: Marriage & Money Matters
(Editor's Note: This is the second in a series of blogs by LaRaine McCoyof McCoy Wealth Advisorswith information about finances relating to relationships. Read the first here.)
By LaRaine McCoy
Married couples fight more about money than anything else. In fact, fights over finances are a leading predictor for divorce. The good news is you can avoid these pitfalls by communicating clearly, acting transparently, and developing a plan for a healthy financial future.
When it comes to finances, forget "yours" and "mine" – it's "our" money now. Building a successful financial foundation in marriage requires both partners to take an active role in managing the family finances.
It's important to share family finances in marriage. Money required for paying bills, buying groceries and any other collective expenses could be placed into a single account. Often married couples choose to keep some financial freedom and flexibility with separate personal spending accounts.
Here are some suggestions to keep financial disagreements from wreaking havoc on your marriage and hurting your family.
1. Come together. Identify common short-, mid- and long-term financial goals and work together to achieve them. Assume equal partnership over finances, even if one spouse earns more money. One person may pay the household bills, but the other should also review monthly statements. Both should be just as knowledgeable about income and expenses, as well as savings and investments.
2. Develop a budgeted spending plan. "Winging it" each month and hoping to break-even is not an acceptable financial solution, no matter how much money you make. You need to create a spending plan for each month. Review it at month's end to make adjustments in allocations and/or spending behavior.
3. Build a rainy-day emergency fund. Car repairs, medical bills, a leaky roof - these are just a few of the unexpected emergencies that can derail even the best-laid spending plans. A rainy-day emergency fund is your secret weapon against a financial crisis. Establish a separate account reserved only for emergencies.
4. Make time to talk money. Schedule a monthly family financial discussion including all members of the immediate family. To help it go smoothly, try the following tactics:
- Establish meeting ground rules. They should include: always listen, no shouting, be respectful and more.
- Stay positive. Be honest about your situation, but look to everything as an opportunity for improvement.
- Keep your cool. Decide in advance how to handle heated topics and disagreements. Consider setting a time limit.
- Be open about money issues.Transparency is key, and communication is essential to building a healthy financial future, together.
- Involve your kids. The old adage goes, "Careful what you do… Children will watch and learn!" Setting a strong example by involving them in your financial discussions can help them win with money in adulthood and impact future generations of your family.
5. Get help from a professional. If you're struggling to identify clear financial goals or aren't sure where to start, consider working with a financial advisor to develop a financial plan you can stick to as a family.
For more on this topic, viewthis videofromMcCoy Wealth Advisors.
LaRaine McCoy ispart of McCoy Wealth Advisors, a husband-and-wife financial advising team committed to supporting the Women of Direct Sales.
Securities and Investment Advisory Services offered through H. Beck, Inc., Member FINRA, SIPC., a Registered Broker Dealer & Registered Investment Advisor. McCoy Wealth Advisors, LLC is not affiliated with H. Beck, Inc. Branch office is located at 409-A W. Main St, Westerville, OH 43081. Phone: 614-212-1188.
This information should not be considered tax/legal advice. You should consult your tax/legal advisor regarding your own tax/legal situation.
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