How to Master Money Management as a Married Couple
Money management, or the lack of it, can cause conflict in a relationship and even a lack of trust. Individuals have their own values and spending patterns -- what may be considered a wild extravagance by one is regarded as an absolute necessity by another. When a married couple has joint responsibility for household expenditures, the partners should agree to a system that is acceptable to each individual while meeting the financial needs of the household.
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Instructions
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Review your household's financial needs. Set aside some uninterrupted time with your spouse to go through bank and credit card statements and household bills. Calculate and list the amounts paid for utilities, telephone, rent or mortgage, insurances, cable, Internet and any other household expenses that you pay on a regular basis.
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Calculate the amount needed to cover your joint monthly expenses and prepare a joint household budget. In addition to regular payments to service providers, you may wish to include other items that benefit the household, such as gasoline, groceries, child care and and medical expenses. Itemize all expenses in your budget and allocate a monthly amount to cover each.
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Analyze your joint budget. Identify any savings you can make by negotiating reduced prices or cutting unnecessary spending. Make sure you have built in a contingency amount to cover unexpected emergencies such as auto or house repairs. Decide whether you wish to allocate sums for vacations, the holidays and family gifts. Finalize your budget.
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Examine your individual net monthly income. Decide how much each spouse will pay into a joint account every month to cover budgeted household expenditure. This will depend not only on your level of income but also on your personal spending needs. Some couples contribute equal amounts; others contribute a set percentage of personal income while others pay the bulk of their income into the joint account, retaining either identical, modest allowances or just enough in to cover predicted personal spending. If one spouse is a full-time homemaker, establish how much the other should provide for personal and day-to-day purposes.
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Open your joint checking account. Arrange monthly transfers from your individual accounts. Where appropriate, organize automated payments to service providers. Set up an online banking facility.
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Set ground rules for using the joint account and for credit card purchases. The simplest way to deal with credit cards is for each to maintain an individual account to be managed and repaid apart from the household budget. Both should undertake to keep tight control of credit card spending. Agree to restrict use of the joint bank account to items specified in your agreed household budget.
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Reconcile your joint account every week using online account access. Once a month, sit together and review the situation. Identify any over-budget items and determine whether it is necessary to increase the budget, and your personal contributions to the joint account, or whether spending in that area needs tighter control. Take this opportunity to raise any concerns about your individual finances. If you are struggling day to day and increasingly relying on your credit card, now is the time to discuss this.
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Maintain an open dialogue about financial matters. If you become aware of an imminent, unforeseen expense, discuss this with your spouse at the earliest opportunity. Never be afraid to admit to any financial mistakes or errors of judgment and do ask your partner for help if and when needed.
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Tips & Warnings
In the event of an increasing surplus in the joint account, jointly decide whether to transfer funds to savings.
Decide in advance how to allocate bonuses and other income of an irregular nature.
Financial discussions easily develop into emotional exchanges, particularly when money is tight. Be prepared for this possibility and take a break to make coffee or simply relax for a while.
References
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