Are you and your spouse arguing lately? Chances are that money may have something to do with it. Thirty-five percent of all couples experiencing relationship stress say that money is the primary factor. Adding fuel to the fire, one in five Americans say they have even spent $500 or more and not told their spouse. It’s not surprising, then, that arguments about money early in marriage are the top sign that a couple is heading for divorce, a Kansas State University study found.
Fortunately, there are often steps you can take to reverse this trend before it’s too late. Here are three ways you can cultivate more financial harmony in your marriage and improve your overall relationship in the process.
Talk to a Financial Coach
Financial arguments often stem from differing beliefs about money. In some cases, talking to a financial coach can help you work through these issues, while in other cases, a marriage counselor would be more helpful.
A financial coach can help you if you and your spouse aren’t on the same budgeting page, if you’re struggling with debt or if you one of you is hiding money from the other. But if one of you is being financially unfaithful by spending money behind the other’s back, or if there’s a problem such as a gambling addiction, you need a marriage counselor. And if you’re getting married, you should talk to both a marriage counselor and a financial coach.
Create a Budget Together
Creating a budget is the first step toward effective financial coaching for couples, says Engaged Marriage author Dustin Reichmann. Get started by simply writing down your monthly income and expenses. To manage your data more easily, consider using a spreadsheet or a financial app such as Mint.
Planning how you’re going to use your income and budget your expenses is the next step. This involves prioritizing your spending and deciding how much you’re going to save after you cover necessities. A good rule of thumb known as the 50/20/30 rule is to allocate 50 percent of your monthly income to paying for necessities, using 20 percent to pay off debt and save, and allowing the remaining 30 percent for variable expenses, including items such as gas and groceries that can vary monthly as well as entertainment items such as eating out or going to movies.
After getting a handle on your short-term budget and figuring out what you have available to save, it’s time to start thinking about long-term financial goals and what you’re going to save toward. Dave Ramsey recommends saving up a $1,000 emergency fund before pursuing other financial goals such as paying down debt or saving for retirement.
Segregate Joint and Separate Accounts
When it comes to where to put the money you’ve budgeted, one issue that can come up is who controls your money. To address this, many financial coaches recommend having both joint and separate bank accounts. For example, if you earn different incomes, you might divide up how much each of you deposits into one or more joint accounts to cover necessities and savings, while maintaining separate checking accounts for discretionary spending.
Having joint finances means that if one of you gets your identity stolen, the other is at risk, too, jeopardizing your entire household finances. Consider signing up for an identity protection service that can alert you to when your identity has been compromised and take automatic action to protect your and your spouse’s finances.
Talking to a financial coach, creating a budget together and setting up joint and separate accounts are three steps you can take to get your financial relationship on track. Putting these strategies into practice can help you get your finances in order, reduce financial arguments and improve your overall relationship.