They say money is the root of all evil. While this is not necessarily true, it’s one of the reasons why most couples fight. For some reason, love jumps out of the window when money matters come in.
With this being said, it is important that you both know how to manage your finances. Not only to avoid those unnecessary fights but to also provide well for your family. If money matters have been your constant struggles, these tips on how to manage your finances properly can help you:
1. Have a clear understanding
You should have transparency when it comes to your finances. Talk about your individual savings account and how you want to handle your money. You should also set rules when it comes to your spending. For example, before you buy something that costs more than $100, discuss if it should be purchased or not.
2. Write down your financial goals
Now that you have discussed your current financial standing, create plans for your financial goals – this could be short-term or long-term. How much percent of your salary do you want to save? Do you plan on buying a car or purchasing a house in the near future? Would you want to save a portion of your money for your retirement?
If you have a clear picture of your financial goals, you will be more conscious of how you spend your money. Having the same financial goals as your partner will make your relationship more harmonious.
3. Create an emergency fund
Sometimes life throws unexpected circumstances at us. If we are unprepared, we are caught off-guard and it can get the best of us.
Having an emergency fund is important in case any unexpected circumstances such as family sickness, accident, or unemployment happens. In fact, an emergency fund should be on your priority list when you’re making your monthly budget. Allocate at least 6 months of your monthly expenses so that you have ample funds.
4. Make your monthly budget
With you and your spouse’s income combined, work out a monthly budget. You should agree how much would you like to put in your savings account and how much would be spent on necessities such as food, gas, school fees, etc. Make sure that you write down all expenses so that you can review them at the end of the month if it needs to be adjusted.
Live within your created budget. If you only allocated 30% of your expenses toward your food budget, dining out at expensive restaurants almost every night does not seem to be a good idea. You’ll end up overspending on your budget and struggle for your financial status.
5. Keep track of your budget
Though making a budget is important, keeping track of your budget is equally important. This is where your discipline will be tested. Make sure that you live within your budget so that you won’t be buried in debt.
Though there are many apps or software that you can use in keeping track of your budget, old school methods are still the most effective. Try using the envelope budgeting system.
Once you have allocated your expenses for categories such as food, allowances, gas, etc, create an envelope for each category. Say if your budget for food is $1000, put $1000 cash in its envelope. Once you’ve used up all the cash in this envelope, you are not allowed to spend any more on this category.
This method has been around for a long time and for good reason. It’s proven to be effective, teaches you discipline, and helps you not to overspend.
6. Have a weekly money talk
Allocate a time where you and your spouse can discuss your financial status. Review your expenses together and figure out where you stand financially. This is also the time where you discuss any upcoming financial expenses, such as renewal of your driver’s license.
Being on a budget does not mean that you can’t have fun. If you want to go on a vacation, talk about your preferred destination and possible expenses. Then, work on how much savings you can set for your vacation fund. Choosing an all-inclusive destination or a family-friendly resort can help you save money as it offers all amenities. An all-inclusive destination can become even more affordable by using a Sandals discount code
These weekly money talks do not only help you with your financial expenses but it also helps foster good communication between you and your spouse.
7. Avoid debt
Being in debt is like stepping into quicksand. You will have a hard time getting up because it will pull you down until you are drowning. Living within your means is the most effective way of staying out of debt.
It may be hard to resist that limited-edition signature bag, but it’ll save you from having a huge headache when you see your next credit card bill. Money is one of the most important aspects of a relationship. Knowing how to deal with it properly will strengthen your trust and confidence with each other.
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Author: Kiley Morrow
Kiley Morrow is a travel and relationship expert. She’s spent the past 3 years travelling the globe and sharing all the experiences she had through tips and guides.
