Since money is capable of connoting a host of different meanings to different people, it has become a dreaded topic of discussion, and consequently, a premier reason for divorces.
In a marriage, it is imperative that you establish certain ground rules with respect to money so as to avoid unpleasant squabbles and disagreements down the road. Couples must discuss their finances before it is too late. Here is a step by step guide to help them glide through those potentially stifling monetary scenarios with ease.
1. Find Time to Talk about Money
Appreciate the fact that finance is an important issue influencing your lives, so determine some time and space specifically for resolving all your financial matters.
Avoid talking about such issues during lunch or while playing scrabble. Instead, plan the discussion at a time when there would be no distractions such as visitors or phone calls. Also remember to switch off all electric gadgets before initiating the talk.
Refrain from bringing up this topic in a public place. It is always better to talk about your personal finances in the privacy of your home.
Remember to keep all your check books, bills, credit card statements and bank statements handy for reference during the talk. Do your homework and prepare yourself for the discussion by going through all these documents beforehand.
2. Approach the Topic with the Right Attitude
At any point throughout the conversation, do not indulge into a blame game. You might be tempted to do so at numerous occasions, but try to be as polite and respectful as possible.
Be honest in reviewing your spending habits and also be open to suggestions. You could also tell each other about what money means to you and how exactly you feel about your present state of finances.
Be prepared to accept your mistakes and listen to your husband’s point of view before drawing conclusions.
Go through all the relevant documents peacefully, without getting agitated. And if, at any point of time during the discussion, you do not agree with your husband’s opinion, try to explain in writing what according to you is a better option.
3. Setting-up Financial Goals
Determining your short term and long term financial goals is just the right point to begin financial planning from.
For this it is important that you have a clear understanding of each others’ financial aspirations, dreams and even fears. Once you comprehend what each one is looking for, you can establish a common platform from where to take off.
Make up your mind as to what all you would like to achieve within the next six months and the next five years from now. Once you have your priorities clear, preparing a plan of action to achieve the same becomes easier.
4. Developing a Budget
By this time you would already have a fair idea of each others’ spending habits and your average monthly expenditure. Design a household budget that can cater to all your needs and also make space for some savings at the end of the month.
If you already have one, which is not working effectively for you, review it to find out loop holes.
5. Allocation of Responsibilities
This is perhaps the trickiest of all steps. Rarely are both partners equally competent at handling finances, hence an understanding of each others’ blind spots is essential.
Jobs can be allocated on the basis of this understanding. As far as possible, divide the responsibilities equally. When both are equally active in managing the household finances, the chances of a flaw get automatically minimized.
It is also important to review these responsibilities from time to time so as to bring about desirable changes in the existing set-up.
6. Maintaining Separate Credit Cards
It is desirable that both of you have separate credit cards in your own names. This makes the process of maintaining separate credit histories much easier.
Further, in case of a death or divorce the process of obtaining a mortgage or a loan also gets simplified.
If you haven’t been talking about your personal finances too often, who knows, a money dialogue could even play cupid and get you closer to each other.