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The financial union formed by newly married couples is not always harmonious. By following these key principles newlyweds will be better equipped to check their emotions at the door, while focusing on the vital issue of managing their money.
It may be safe to assume that, when two people come together in marriage, they also look at it as a financial merger. If both are working, they know they will combine their incomes; they know they’ll be saving together for future goals; and, often the first thing they’ll do to validate the merger is to open a joint checking account. If it was only that simple; because, as we all know, the devil is in the details.
Considering that money issues are the leading cause of marital strife and divorce, one can also assume that most couples fail to discuss the little details that can suddenly blossom into big problems. The ensuing arguments are reactions to unanticipated problems. Imagine how different things could be if you could anticipate the problems and have a strategy in place to guide you through them. Without a strategy, money issues become emotional, which makes it more difficult to overcome. With a strategy, decisions are grounded in a rationale formed by mutual agreement. Now, that’s true marital bliss.
If, before they were married, couples would thoroughly discuss these key principles of a healthy financial relationship, and work together to develop a strategy around them, any problems that do arise will almost take care of themselves.
What’s Your Vision of a Good Life Together?
Having clearly defined goals is a starting point - knowing what you want to achieve financially, so you can set priorities and start saving towards those goals. However, even more important to creating true financial harmony is coming together with a shared vision of the future based on your values, beliefs and purpose. That’s the path to fulfillment which is the key to happiness. Without a shared vision, and with no real purpose behind what you want to achieve, people tend to get caught up in the “pursuit of more” which never brings contentment. When a married couple is able to stay focused on their values and purpose, they have much more clarity and conviction in their financial decisions.
Keeping Your Independence
Opening a joint checking account together is thought to be a validation of marriage and the financial bond that comes with it. It also makes practical sense for many aspects of managing finances together. However, it can also lead to a centralization of control if one spouse takes the upper hand in money management decisions, and that can lead to resentment. Checkbook bickering over each other’s spending habits becomes a slippery slope to larger problems.
Realizing that we are individuals before we are a couple, it’s not unreasonable to expect some autonomy over how we spend our money; at least that portion that can be spent while maintaining the financial integrity of their relationship. With strict budgeting, and by living under your means in most aspects of your financial lives, it should be possible for each spouse to manage their own spending account for things they want to purchase on their own. Having separate checking accounts, in addition to a joint account, can relieve a lot of the stress associated with having to account for every dollar spent, as long as there is agreement on the budget.
Dealing with Debt
When two people are joined in matrimony, they are also joined in debt. Typically, the debt is one-sided, with one of the spouses bringing all or most of it to the marriage. That can be a problem; however, the larger problem is when the indebted spouse doesn’t disclose it. Bringing debt into a marriage, regardless of where it comes from, is not a good idea. If it can’t be paid down before the wedding, there should at least be a detailed plan in place to pay it off soon after.
Live by the Budget
There is no better time to build a budget and commit to sticking to it. Living by a budget is about forming spending habits that can stick with you forever; so, the absolute best time to form new habits is when two people decide to share a life together. It starts with creating your vision of a good life and agreeing on specific goals that serve your purpose in life. With that as your foundation, it’s easier to evaluate each dollar you spend as to whether it gets you closer to your vision. And, it’s easier to hold yourselves accountable for your spending. Most couples will succeed financially if they live within their means. True financial independence can be achieved when you live under your means.
Be Prepared when Life Happens
There’s one thing of which all married couples can be certain - life happens. And, it’s doesn’t always happen as we expect. It’s the unexpected things in life which can turn lives upside down - a medical emergency, the loss of a job, a natural disaster, or even the unexpected arrival of a baby - if you’re not financially prepared. Ideally, a couple will begin their life together with savings in the bank, which, when combined, can become their emergency fund. Short of that, their very first undertaking should be to build an emergency fund that can cover six to 12 months of their living expenses. In addition, they should insure everything that could create a financial hardship if they should lose it, including their lives, their income, their home and their property.
Pledge Your Financial Fidelity
The only thing worse than infidelity in marriage is financial infidelity. Keeping financial secrets from each other is a sure path to marital strife, if not outright divorce. It’s not uncommon for a marriage to end over money issues, such as debt, gambling, or spending habits, that were concealed for the sake of keeping harmony. Even the smallest deception can cause resentment and distrust.
The real issue is communication. Open and honest communication about money is essential to a happy marriage; and it goes back to the shared vision and values which should form the basis of any discussion or decision about money. Couples who make a point to discuss money issues regularly are better positioned to deal with problems before they threaten their marriage. By following these principles of financial harmony, couples can be better equipped to keep their emotions at bay while focusing their energy on the planning and strategies that can ensure their financial success.