How to Handle Finances in a Relationship
Money can be such a dirty word.
Get this: Money is the second leading cause of divorce in the US (behind infidelity). Many sites have articles, surveys, and polls that list out startling stats that are enough to make you cry (and steer clear of commitment like it’s your full-time job). Most cite high amounts of debt and lack of communication (this doesn’t surprise us!) about money as being the drivers behind the sinking ship.
The American Psychology Association says 40-50 percent of marriages end in divorce (and there is some wiggle room due to permanent separation while remaining married).
Now you may not be married right now, but your future may include formal vows (let’s leave out the “obey” part, please and thank you). So let’s put on our practice pants and get to work now on being a team player when it comes to money!
Here are four tips for how to handle finances in a relationship when it comes to both earning and spending money.
Ask for help.
Now for some of you, this may not be so simple, but no one ever got anywhere when they went 100 percent solo (except maybe a good hike). Everyone needs someone to bounce ideas off of, a different perspective, or just a “good game” butt slap. Hey, you appreciate someone’s help when they see something that you don’t, right? (Hint: your fly is down.)
So when you’re stumped on your budget (make one in five easy steps) or need to think of a plan to raise extra funds to fix your car’s grinding noises, ask your partner for help. Ask and be prepared to listen. Then say thank you.
Think about it, when someone asks you for sincere help, you feel pretty good about yourself and your relationship. This simple tactic can be used for so many things, and definitely something you should become comfortable with.
Share your goals.
Some days it feels like just putting on pants and leaving your apartment is a good goal. But with you partner, share your goals of what you want your future to look like.
You want to own your own home? Share it! Do you want to own a 1970 Ford Mustang with a Boss 302? Hey, maybe your significant other has an uncle that works at a car shop that works explicitly on old ‘70s muscle cars. BUT you wouldn’t know that unless you share, right?
Now, your goals may not have anything to do with saving money, but I’m pretty sure you will need money to reach some of them. Maybe you find out that you both want to go on a vacation to Bora Bora? Say hello to a joint travel vacation savings account. I highly recommend a high interest online savings account with 1.9% APY. That’s 20x higher than the national average.
Sharing your goals still means that you need to be smart with your money. So go ahead print out that picture of that bungalow over the water, bust out your crayons and make a money thermometer (you know, like the fundraiser type thing from grade school). You can also go the digital route if you’re not into arts and crafts.
Post your goal on your fridge and get to saving.
Talk about it.
So from the other tips you may have noticed a trend… TALKING about money. If you didn’t get that hint, go back and reread it. I’ll wait. You back? Cool. Let’s continue.
When you don’t talk about something in plain sight, then it gets somewhat awkward. Only when you start communicating and doing it often do things get easier.
Traditionally (aka our parent’s generation), talking about money wasn’t a polite topic of conversation. Maybe you grew up in a household where money was a sore spot?
We are not ostriches. We can’t stick our head in the ground and ignore money issues… because they don’t ever go away without action. If you’re having anxiety about it, and that’s completely normal, try some of these ways to alleviate it before diving into conversation.
Yes, it may be weird in the beginning, but it will get easier, just as everything does with practice.
Do a money challenge.
These can be a lot of fun if done correctly. It is fun to have a goal, potentially a goal that maybe you think you can’t achieve. But then it gets turned into a game…and guess who shows up with a full tummy of Wheaties? YOU!
Here are a few:
- Do a No Spend Month
- Cash only envelope challenge
- Eat just what is in your pantry
- Save all the $5 bills that you get
- Cut 50 percent of your subscriptions (you won’t notice, trust me)
- Try the 52 Week Savings Challenge
Keep it lighthearted. No one likes a sore loser (or a lousy winner). In fact, you don’t even need to have a winner, set it up as a team challenge! You are just starting to learn how to handle finances in a relationship (it’s a marathon, not a sprint).
Whatever you decide to do to help you and your honey get better at this thing called money management, know that nothing is set in stone. If one thing doesn’t work after some decent effort and time, then try something different. Just keep trying.
If you need 1:1 help for your finances, apply to come work with Whitney Hansen for financial coaching.