We each have an internal compass when it comes to money. Many of us feel it is important to maintain a safety net just in case, while others prefer to enjoy life to the fullest. It is a balance of risk and reward, needs and desires, and it is the greatest cause of discord among married couples. How can a saver be happily married to a spender? Here are a few tried and true guidelines:
Embrace your Differences
We all have different attitudes and opinions, and these differences make life interesting. It is best to accept that your significant other has a different way of thinking about money; that’s not likely to change. If you communicate effectively, and treat each other with respect, you will be well on your way to finding a happy middle ground.
Establish Common Goals
Building a life with another person is very exciting. Because you will share many experiences, it is important to establish common goals, many of which will involve significant expenditures. Sit down and establish a ‘big picture’ financial plan. Discuss home ownership, vacations, emergency savings, credit cards, existing debt, vehicle purchases, education expenses, retirement savings, and other financial matters. Come to a general understanding about how you plan to achieve these goals together.
Discretionary Spending Allowance
To prevent either party from feeling deprived, each of you should be able to spend a portion of your earnings anyway you choose. You may prefer to save up for a special purchase, or spend a night out on the town with your friend; it’s up to you.
The amount you designate for your allowance may be a set amount or a percentage of your earnings. You should also discuss in detail, what types of purchases will be included in the monthly household expenses or personal allowances. The timing of the funds distribution should also be agreed upon. It is recommended to write your agreement down as a reminder.
Set a Purchase Limit
When sharing a household with another person, it is likely that each of you will have distinctly different ideas about how much money is left in the budget and what that money should be spent on. Set a limit that you agree not to exceed without first discussing the purchase with your spouse. Maintaining a spending limit significantly reduces financial disagreements among couples.
Compare Notes Regularly
Whether it’s every week, every paycheck, or every month, schedule a time on your calendar to sit down and review the state of your finances. Keep the discussions friendly, reminding one another of your mutual plan. This is also a good time to negotiate whether the purchase of a new barbeque grill will be paid for through the household account or personal allowance. Coming to an agreement in advance helps keep everyone happy.
Understand Everyone Makes Mistakes
When the inevitable mistake happens, keep things in perspective. Work together to find an immediate solution and devise a strategy to prevent it from happening again. Remember, nobody’s perfect.
Achieving Marital Bliss
According to a study by the American Psychological Association, as many as one-third of relationships identify disagreements over money as a source of conflict. By establishing shared financial goals and maintaining open communication, savers and spenders can find a happy medium.
Serving the needs of your community for more than 125 years, the staff at Mercer Savings Bank is available to help you evaluate your financial options and plan for your future together. Stop by Mercer Savings Bank today or contact us online.