To
live a happy and peaceful life with financial freedom, it's very important to
manage family finances properly. Failing to manage spending or agree on
financial decisions can cause a married couple to fall into endless arguing. To
get through the many financial decisions present in married life, you have to
coordinate a budget and financial planning with the whole family and keep an
open dialogue going about the family's money.
Talk
openly about your finances.
While this is important all the way through life, it is especially important to
establish financial honestly before you get married. If one partner has a poor
credit history or large debts that are not brought up before marriage, it can
lead to resentment and problems down the road. Before getting married, you
should meet with your loved one and discuss his current financial situation,
including how much he makes, where that money goes, his credit history, and any
large debts he is carrying. This sets the tone for financial openness in the
rest of your lives together.
Meet
regularly to talk about money.
Decide on a time of the month to get together specifically to discuss your
finances. Perhaps this meeting can coincide with the arrival of the monthly
bank statement or the due date of monthly bills. In any case, use your time at
this meeting to assess the previous month's expenditures, mark your progress
towards long-term goals, and to propose any changes or major purchases that you
want to make. Only by talking about money regularly can you make doing so a
comfortable and productive experience.
Don't make one person the sole manager of the
family's money.
Many families choose to allow one person to take charge of all the family's
finances; however, this places an unnecessary burden on that person and leads
to others' being unaware of the family's current financial situation. In
addition, if that person leaves through death or divorce, it leaves the others
completely unaware of how to manage or even access the family's finances. Solve
this problem by splitting up tasks between you or by managing finances in
alternating months.
- Both you and your spouse should attend any meetings with financial professionals, such as those with a loan officer or investment advisor.
Decide on an account setup. Families
have options when it comes to setting up joint accounts. Some choose to keep
everything together while others keep their finances mostly separate. At
minimum, you should have a joint account to pay for household expenses and your
mortgage payment. At the end of the month, you can split these expenses in half
and each transfer in an equal amount of money into this account to pay these
expenses. Having separate account can prevent arguments that might arise from
one person's spending habits.
- Just make sure to set limits to how much money each of you can spend each month so that one person doesn't end up spending all of the family's money.
Build up individual credit. Even
though your finances will be combined, it is still important for each of you to
have a strong credit score. Doing so will ensure not only that your credit will
be good when you apply for credit jointly, but also that your credit history
will remain intact if you split up. A simple way to manage this is by having
separate credit cards, each established only in the name of the spouse who uses
it.
