mercredi 9 mai 2018
10 Secrets All Successful Couples Know About Money
Money. It's a topic so personal we have trouble talking about it with our significant others.
One study from the University of Wisconsin - Madison looked at 100 married couples and concluded that "compared to nonmoney issues, marital conflicts about money were more pervasive, problematic, and recurrent, and remained unresolved." In order to avoid that pitfall, you must prioritize open and honest communication and create good financial habits as a couple. Once you set them up, these habits will help you manage financial stress, one of the biggest threats to a relationship. You'll also get another benefit: the financial means to achieve your dreams as a couple.
Couples who are "good with money" know that proactively managing your household budget is good for your bank account and relationship. They've overcome the pitfalls of debt, navigated setting up joint banking accounts, and figured out their tax situations. If you want to be like them, here are 10 tips we've gathered from personal finance experts. Read on for things all couples who are good with money do.
1. They Openly Discuss Small Purchases
It's never too early to build healthy communication around money. "Early on in a relationship, start talking about money before you need to," says Kimmie Greene, a consumer spending expert for the online money-managing tool Mint. You can do this by discussing your ideal budget for a weekend away or by sharing what you plan to do with a bonus check. Talking about small purchases is easier and will help prepare you when it comes time to spend on big-ticket items together, like a wedding or a house. It will also give you insight into how your partner thinks about money.
"Raising awareness at an early point, even prior to partners combining their finances, may prevent future cycles of negatively handled and unresolved conflicts concerning money later in the relationship," concludes the University of Wisconsin paper. Once you've been together for a while, keep this up by letting your partner know when you plan to splurge on concert tickets or a new purse, even if it's with "your" money and not from your joint account. Being upfront about small purchases helps build trust.
2. They Set Specific Goals For Big Purchases
You need to agree on shared priorities. As a couple, try to answer questions about major future expenses: luxury car or used car? Private school or public school? House in the suburbs or city condo? If you communicate and compromise on the big things up front, you'll avoid blowups and misunderstandings later. There's usually room for competing goals, as long as you plan ahead. Rod Griffin, director of public education at credit-monitoring site Experian, also notes that "working toward a common goal can help you align when it comes to spending."
3. They Are Honest About Their Flaws
In addition to setting your financial goals, you need to discuss what obstacles will get in the way of achieving them. Be honest about your financial "flaws" as soon as you can. These can include credit card debt, student loan payments, or a bad credit score. Experts agree that this will help avoid surprises.
If you're still relatively early in your relationship, tax season might be a good time to bring up the uncomfortable topic. For example, you can share your student loans by mentioning the tax credit you will get. If your partner brings up a red flag, try not to judge. Instead, share your expectations and encourage them to come up with a game plan to address the issue.
4. They Celebrate Milestones
You'll be old and gray by the time your pay off a mortgage or dip into that 401k. So how do you stay focused today? Set interim savings goals and celebrate success along the way. "Looking for a new home and just reached 25 percent of your savings goal? Take a date in your new neighborhood to try a hot new restaurant," suggests Greene. She believes these small celebrations can make your savings goals more real and encourage you to keep going.
5. They Focus on Saving Goals, Not Spending Limits
"As long as you're meeting your savings goals, whether you have a latte or a shoe habit may not matter."
Consider flipping the script on your financial conversations. Instead of talking about how much you spend each month, talk out how much you save. It frames things in a positive light. You can simply aim to increase the amount you save each month or work toward a specific dollar amount. Greene explains, "This helps to alleviate pressures that can build up and cause stress around individual expenses. As long as you're meeting your savings goals, whether you have a latte or a shoe habit may not matter as much."
6. They Don't Always Split Things 50-50
It's a good idea to set up a joint account for joint expenses. Just don't assume you will go 50-50 into the account. Greene has this suggestion: "Talk to each other about the expenses you share together and consider your incomes to decide whether or not you pay into that joint account equally or in percentages weighted on overall income." For example, if you partner makes 25 percent more than you, he or she should contribute 25 percent more to the account each month.
This arrangement will help ease tensions that arise when one person feels overwhelmed by higher expenses because they make less money. As your relationship progresses, you may consider blending all your accounts. But the transparent and fair approach you took while keeping things semi-separate will serve you well into the future.
7. They Both Stay Checked In on Their Finances
What if one person is just "better" with money? That's OK! Any successful relationship lets each person play to their strengths. It's fine to let one person in the couple take the lead - as long as you set up regular check-ins. The University of Wisconsin study found that our personal feelings of worth are affected by "the perceived capacity to engage in decision making about money." In other words, we feel more valued in the couple when the household finances are treated as a partnership.
Greene has a tip for taking a collaborative approach, recommending that each person have login information for your joint accounts or finance monitoring services. "Consider setting up a joint email account for logging in to your preferred personal finance app," she says. That way both of you will have visibility into the notifications and account updates. "This helps make both people accountable for where you stand with your money, removing any frustrations that might crop up if just one person knows the latest."
8. They Schedule a Time to Review Monthly Spending
Balancing the checkbook once a month used to provide the perfect opportunity to review spending and saving. Couples no longer need to go through the tedious task, but they should still schedule a date to talk money. Griffin recommends planning "Finance Fridays" with your partner, "setting aside time one Friday each month to check your bank accounts and credit cards, as well as your credit score and report, together." Throw something on your Google Calendars so you don't miss the date, and use it as a forum to discuss your saving goals and to celebrate your small victories.
9. They Know Their Tax Situation
Once you're married - or considering marriage - it's time to think about your tax situation as a couple. Those who are good with money know how to best leverage their circumstances. "Generally, couples who file married filing jointly may be able to take advantage of what is known as the 'marriage bonus' since tax rates are typically lower for couples filing married filing jointly," Lisa Greene-Lewis, a tax expert for TurboTax. Married couples can often claim more tax deductions and credits when filing jointly, like education tax credits worth up to $2,500, the earned income tax credit worth up to $6,269 for a family with three or more kids, or the Child and Dependent Care Credit worth up to $2,100 for two or more kids.
Greene-Lewis suggests taking the time to run your numbers through both scenarios: married filing jointly or married filing separately. TurboTax, for example, will give you numbers for both.
10. They Use Financial Tools
There are a ton of financial planning apps and websites that will track your progress. Turning to third-party services help check your assumptions about where your money is going. They are also a tool for better communication. Greene explains that using an online financial management service can take the stress out of financial conversations, "boiling them down to the facts." That can be particularly helpful when one person in the relationship is emotionally attached to a particular decision. She explains, "We often hear, 'Mint saved my marriage,' as it is easier to blame Mint than your spouse for that new TV or vacation that isn't going to happen this month." And when things go right, let yourselves take the credit as a couple!
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