This time of year, love is in the air. Unfortunately, navigating relationships and finances can be tricky. Money issues are one of three of the leading causes of divorce, with 22% of surveyed individuals citing it as the reason for their separation.
It can be hard to talk about money. However, it’s important to work together when it comes to financial goals and dreams before opening a joint account, becoming one household, or having children. If one of you is the spender, the other is a saver and you aren’t working together, it will only strain your relationship. Cierra Brownell, Assistant Vice President and Financial Wellness Coach at Workers Credit Union, has tips on how couples can talk to each other and navigate love and money as a team.
Having an honest and open conversation about goals and priorities is the first step in talking with each other about money. It’s important to agree on these because if your goals don’t align, financial planning won’t fall into place. Savings goals determine how you plan to live your life. Think about how much you want to spend on the holidays, vacations, or kids if you decide to have any. This will help determine how to allocate funds to each of your collective goals.
Approach Collective Debts
Next, look at your collective debts and consider how you want to approach paying them off. Do you want to make minimum payments only? Do you want to be more aggressive on one because you’re working toward retirement and want extra money for your mortgage payment so you can pay if off early? By deciding on the timeline for debt repayments, you can align as a couple on strategies for managing debt moving forward.
Set Budget Together
Budgets are a powerful tool for financial planning. Consider if you want to have individual budgets or have one budget for the two of you. If you go with individual budgets, it’s good to discuss what you can each contribute to your agreed upon savings goals each month. Couples who go into financial planning open-minded are most likely to be successful. Cierra worked with a couple who both knew their strengths and weaknesses and were open to talking options and advice. They wrote down the advice to bring it home to talk about it. Then, Cierra met with them again to discuss their budgeting decision. This allowed time for the couple to work together as a team, resulting in aligned decisions that ultimately benefited them in the long run.
Honesty is key. It’s important to be open-minded with your partner as you have these sometimes difficult conversations. No roadmap works for every relationship. Workers Way Financial Wellness Coaches can help you and your partner find strategies that work for you both as you balance love and your checkbook with confidence.
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