Yours, Mine, Ours? How Couples Can Manage Money

Many factors lead to misunderstandings in marriage, but none has the same severe implications as money misunderstandings. 

Never-ending disputes that can ultimately lead to divorce and separation will be the bread and butter of your relationship if you and your partner can't find common ground on how to make money, spend it and save it.

Learning how to manage your finances together as a couple will help you know how to split bills, make investments and save for your future. And this can be hard to achieve, especially when you are just starting your relationship.

So how do you get rid of money conflicts, stay on the same page financially with your better half and live happily ever after?  This article dives into the steps you should take to manage your finances as a couple successfully.

Also read: How to Build Wealth as a Couple in Kenya

Align your Goals

Everyone has their own goals and dreams to accomplish. But when you get into a long-term relationship, compromises have to be made. To achieve financial prosperity as a couple, you should compromise by shelving some of your dreams or taking them off the table altogether.

The only way to align your goals is to decide which goals should be prioritized. Write a list of all your dreams down and start knit-picking. Choose the goal that matters the most to both of you, like the type of house to buy and where to retire. Settle for the choice that makes sense to both of you, and when you can't, find a middle ground.

Some other decisions that might put you at loggerhead as a couple are

• Deciding how to buy a house. Your partner might be interested in getting a mortgage and going into debt, while you prefer to save and buy a house when ready. 
• Educating the kids. What type of school your kids will attend (public or private), and how you will fund their education

• Family vacations. Are you ready to trade off or postpone some dream destination to save money?
• Retirement. How do both of you prefer to retire, and how will you invest in your retirement plan? Depending on your needs and income, you will have to choose to separate your retirement investments from other investments.

Read Also: The Muhanjis: Former P1/ECD School Teachers Turned School Owners

Create a Budget and Stick to it

You can't learn to manage your finances without having a budget you and your partner follow. The benefits of having a budget are unmatched; let's list some.

• A budget will help you set S.M.A.R.T. goals and achieve them. SMART goals are Specific, Measurable, Achievable, Realistic, and Time-based goals you and your partner can embark on if you want financial freedom.
• Help you live within your means and avoid overspending.
• A budget will keep you in line with your saving and retirement plans. 
• A budget will help you keep track of your wealth as you will know when to cut expenses and when to ramp them up.
• A budget will keep you prepared for emergencies all the time.

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Many apps are available to help you and your partner create budgets, track, and stick to them and they are available on both Play Store and Appstore.

You should make it a tradition to sit down at least once a week to track your budget, modify, and update it depending on your shifting needs.

Also read: What to Do If You Lose Your Income Mid-Career?

Be Open About Everything Money.

Financial transparency is the bedrock of every marriage that is to succeed. This is why it is essential to be on the same page with your partner before taking the holy vows. Transparency and honesty about money will allow conflicts to be solved amicably and avoided. 

How do you open up about your finances to your partner?

1. Debts - Talk to your partner about debts you are currently servicing and how they will affect your financial decisions. The debts can be student loans, car loans, or any other loan you took and haven't paid back.

Read Also: Debt and Marriage: Key Things You Need to Know

2. Income - Be open with your partner about all your sources of income. Hiding sources of income can be detrimental to the trust that fuels all relationships.
3. Investments - Let your partner know all your investments, especially if you have children. The main benefit of doing this is guaranteeing that all your investment won't be lost in case of sudden death.

Read Also:Why Estate Planning is Important in Financial Planning

4. Personal Responsibilities - Inform your partner of any personal financial obligations you have. They can range from paying black tax, educating your siblings, or having other dependants outside your marriage.

Protect Yourselves from the Unexpected

Unexpected bills, loss of income, and the fear of losing wealth that you have accumulated for years can't be underestimated. To manage your finances, you should prepare and protect yourself from financial emergencies.

Here are some tips to prepare for unexpected events:

• Emergency Funds: Always have emergency funds when you exceed your budget due to unavoidable events when you or your partner loses their income. A rainy day fund to cover six months is recommended.

• Insurance: It protects you from unforeseeable challenges that could hurt your pockets. The essential insurance that you and your family should have include

• Health Insurance
• Income Insurance 
• Education Insurance 
• Home Insurance 
• Auto Insurance 

• Separation and Divorce: You should consider having a hard talk with your partner on how your finances will be managed should you separate or divorce. If your partner is open to that possibility, you can sign a contract stipulating how investments will be divided and finance managed.

Give each Other a Wiggle Room

Arguing with your partner about a purchase they made can be derailing and cause resentment. This is why you should afford each other some breathing room and not be too hard on one another when it comes to spending. 

Also read: Must-Have Investments That Guarantee You Will Never Run Out of Income

You can do this by creating a section in your family budget that gives everyone a small amount of money to spend on things that make them happy without facing criticism. You can take a step further and have a different personal expense budget.

If you and your partner are running a budget surplus or have developed a new source of income, you can allow one another to follow their individual goals that were shelved for the common good. 

Wrapping Up

Managing finances is an ongoing event; new compromises might have to be introduced, goals scrapped, or new goals introduced. Depending on where you are financially as a couple, you will have to change strategies and adopt new ones.

Always stay ahead of these changes by communicating and reviewing your finances frequently. It can be daunting, but the benefits outweigh the risks associated with a lack of proper management. 

Financial management can be hard, more so when the opinions of two people have to be considered. If this proves difficult, you can hire a financial advisor to help you create management plans that can help you as a couple.