Managing money as a couple is important. Conflict over money is one of the biggest predictors of divorce. Conversely, managing your finances effectively as a couple can catapult you to financial success.
But how do you get started? Oftentimes, we hear that each journey is unique. While that's true, there are some different strategies that everyone can implement to help them manage their money more effectively.
It doesn't matter if you've just tied the knot or your trip down the aisle was a distant memory. These seven steps can help you either kick off your financial journey as a couple or supercharge the one you're already on!
Managing Money as a Couple: 7 Steps to a Wealthy Marriage
Are you tired of fighting about money? Do you feel like you can't make any traction toward your goals? Maybe you don't even have goals! It's all okay. No couple manages their money perfectly all the time, and they certainly don't do it well from the start! It takes practice, time, and effort.
Whether money is a constant source of frustration or an unmentionable taboo, you can get better at managing your money. Here are seven steps you can take to build and maintain a wealthy marriage.
Create Space for Conversation
Do you feel like every day is a blur? Maybe you’re burning the midnight oil on a big project or perhaps you’re in the throes of early parenthood. For so many reasons, most of us feel like we never have enough time.
But the first thing you have to do to lay the foundation for a wealthy marriage is to make space for conversation. Commit to checking in on your partner regularly.
If this is new to you or something you haven’t prioritized in a while, make sure to give yourselves plenty of advance notice. Briefly mention that you’d like to pick out a time in the future to do some daydreaming and planning together.
By framing the topic positively and giving yourselves advance notice, you can start to collect your thoughts on your own and go into the conversation with a positive mindset. You might feel rushed now, but this is one conversation you want to make time for.
Set Financial Goals
After you’ve established that you want to talk, it’s time to set some future goals together. And that means talking about money–at least indirectly!
One of the most common reasons couples give for not discussing money is that one person is uninterested or overwhelmed with money. If dollars and cents on spreadsheets make your eyes gloss over, there’s a better way!
Instead of diving straight into a spreadsheet or a budgeting app, set goals together. What are you most interested in working toward together?
Common goals for couples include:
- A downpayment for a house
- Home upgrades or repairs
- Kids’ college money
After you’ve identified the goals that are most important to you as a couple, you’ll also want to identify a timeframe. This is when the topic of money will come up if it hasn’t already.
Being clear on when you need the money to achieve these goals is crucial. It helps you prioritize which goal you save the most for. A timeframe also allows you to identify the best savings strategy.
For short-term goals, a savings account or money market account is likely your best bet. For long-term goals, you want to explore different investment options like a Roth IRA or a 529.
Craft Your Family Budget
You’ve got your goals, and now you’re probably feeling pretty fired up to meet them. Congratulations…you need a budget!
We know, we know. We said the B-word. But a budget isn’t actually a bad thing. A budget can best your best friend when it comes to taking the stress out of managing your money as a couple.
To keep things simple, you might consider using a budgeting tool like Monarch Money. This modern money management tool keeps the process simple by allowing you to track all of your account balances, investments and transactions all in one place.
The most important thing to remember is that a budget is actually what is going to help you fund the goals you’ve set. It doesn’t restrict you from living; it helps you build the life you want.
To get started with your budget, make a list of all of your obligations, such as rent, debt, and groceries. Then, add other budget categories to cover wants. Review all of these categories to ensure that your goals are listed in some way.
After you set up your categories, ballpark your monthly income and set realistic amounts for each budget category. Some of these amounts are easy to identify because they are fixed based on car payments and mortgage amounts. Other amounts might fluctuate a bit more. To get an idea, review your previous spending by looking at credit card statements or debit card transactions.
Of course, you can and should update your budget to make it better serve you. To learn more about how fintech tools can help you build a better budget, check out our full Monarch Money review!
Discuss Joint vs Separate Accounts (Or Something in Between!)
After you build your budget, you need to decide how to funnel your funds. To merge or not merge your money is one of the most debated financial topics.
The truth is that you want to do whatever works best for your relationship and your budget. For some couples, that means putting all of your money (except for retirement savings, which has to be an individual account!) into joint accounts.
Other people prefer to keep their funds separate and then transfer a certain amount or percentage into a joint account. This can take a bit of trial and error, which is why tools like Monarch Money have these features built in.
Get Clear on Roles and Responsibilities
After you have a budget and know how you will fund it and set aside future savings, you might realize you aren’t quite in the spot you want to be financially speaking. It’s time to play to your unique strengths!
No matter how similar or different you are from your partner, it’s important to be clear on the different roles and responsibilities you each intend to take on. Don’t expect your partner to jump feet first into entrepreneurship if that doesn’t suit their personality. If active real estate ownership doesn’t feel right, don’t force it. Explore other options to grow your income.
You also want to consider your interests, passions, and strengths. If you’re a total money geek, agree to be the point person for managing spreadsheets or updating finance tools. If you love to dream big, you can spearhead the goal-setting conversations.
Also, know that these roles can also change in different seasons of life. It’s possible that when you first get married, you will both be working long hours as DINKs (dual income no kids). However, if and when you decide to grow your family, someone might transition to working from home for a certain length of time. Conversely, someone might take the plunge into entrepreneurship, leaving behind a traditional 9-5.
It’s so important to make sure that you’re honest with yourselves and each other about what time looks like for each of you.
Making sure that you are reasonable with your expectations of yourself and your partner will stave off tension and resentment. Allowing your roles to align with your strengths will keep you motivated to move toward your goals.
Schedule a Recurring Money Date
It's time to set a money date! Money dates are opportunities for you to review your budget, discuss your goals, and tweak your future plans.
The further along you get into managing money as a couple, the best sense you’ll have of what works best for you. For example, some people prefer to set aside a larger chunk of time at the end of each month. Other couples find it more effective to meet more regularly every week. This allows them to spot problems and troubleshoot faster.
No matter how you set up your money date, you want to stay consistent with it. Put it on both your calendars and commit to keeping this money date like you would any other important appointment.
Prioritize Your Marriage First
This step is probably the most essential part of managing money as a couple. You have to make time for your marriage.
It is so easy to get lost in spreadsheets or the hustle and bustle of your day-to-day lives. But you have to also carve out time for yourselves. Explore some of our favorite free and frugal date night ideas. And make sure that you take time to check in with each other and dream together.
If you find yourself struggling, marriage counseling might be the thing you need. An outside perspective can help you identify points of friction and problem-solve before things take a toll.
A strong marriage can help you reach your financial goals much faster than if you were to try to go it alone. That’s why it’s so critical to keep your marriage strong.
Final Thoughts on Managing Money as a Couple
Managing your money as a couple can be complicated. That's where tools like Monarch Money can help! This tool can make the money date process so much easier by keeping track of your financial goals and monitoring your progress over time. And, as opposed to other budgeting apps, it's designed with couples in mind.
No matter how you choose to set up your budget, make sure you carve out time to implement these steps and keep the conversation going. You don't always have to take a deep dive into dollars and cents every time you talk. Instead, make time to keep dreaming and planning together. You'll be building a brighter future in no time.
What are your favorite tips for managing money as a couple? Do you use a tool like Monarch Money?
Please let us know in the comments below.
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