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6 Tips on Handling Money in a Marriage

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This is a post written by Mark B. Aragona for Yahoo! Southeast Asia. You can find the original article on Yahoo! Philippines here.

Back in 2011, I found out that my wife cancelled her credit card as she had gotten into debt. I asked her how bad it was, and she said it was nothing she couldn’t handle. I shrugged and thought nothing more of it—it was, after all, her money. Or so I thought.

A year later, we received a letter informing us that our bank was turning over the debt, which had gone unpaid, to a collection agency. That was the only time I became aware we had a problem, and by the time we got to talking about it, the debt had ballooned to nearly three times its original size.

While we eventually paid off the credit card together, my takeaway from this is that, as a married couple, major financial problems were best handled together rather than apart. While some people disliked talking about money even with their loved ones, the truth is that in a marriage, your money decisions affect your whole family.

On the other hand, pooling all your money together seems to deny your independence and personal needs, and could fuel marital conflict. So where does one draw the line? Does tying the knot mean marrying your finances together, or does it make more sense to keep them separate?

1. Financial planning for two

As husband and wife, you’ve made a commitment to stay together for the rest of your lives. It’s only natural to discuss what your financial priorities should be. Sit down and have a serious discussion about what to do with your money, when and how to make major purchases (e.g., homes, cars) and important future expenses (e.g., children’s education, long-term vacations). And because you’ll be retiring together, it’s important to create a shared retirement plan, even if your contributions to it differ. Once your priorities are set, you can take steps to achieve each of these financial goals.

When you are on the same page, it’s much easier to work together and avoid imbalances and resentments. You can encourage each other during the turbulent times and celebrate together upon reaching your financial goals.

2. Work out a system for living expenses

Make a joint account you can track and keep an eye on what goes in and out of it. Based on your financial goals, create rules and agreements over what to spend for, how much, and who will be responsible for it. Moreover, make sure to keep a monthly family budget that you both help out with.

Even if only one member is earning, the other should also play a role in decision-making, monitoring, and accounting. After all, you share the expenses of a single household.

3. Handle financial problems together

‘Til debt do us part?’ Not if you said ‘For better or for worse.’ As a married couple, you face life and its troubles as a team. After all, your spouse’s stress becomes your stress too. If they have trouble with debt, treat it as a problem to be solved together.

Another thing: do not hide financial problems from each other. Marital problems are often caused not so much by money but by keeping secrets and breaking agreements. These actions never work out for the best and can even destroy your marriage. Shopping too much? Hiding online purchases? Be honest. Problems occur, but your relationship must be bigger than any of them.

4. Have contingency plans for the worst case scenarios

Keeping finances completely separate makes things more difficult for you in the event your spouse dies. Not only is this emotionally devastating, you will have to go through stringent paperwork to withdraw your spouse’s funds from the bank just when you’ll need them the most.

Early on in your marriage, keep a record of important information such as your bank accounts and ATM cards, and make sure your spouse knows how to find them. I’ve found that the easiest way to handle this is for both spouses to maintain separate life insurance policies while naming each other as beneficiaries. These activate upon the death of a spouse and provide the requisite safety net for your family right when they need it.

5. Give yourselves allowances.

While it’s a good idea to combine certain parts of your finances, I’ve found that there are things you’d do better to keep independent. While you should have a joint account and keep shared financial goals and obligations a priority, you can make monthly allowances for yourselves for individual wants and needs. This way, you maintain some financial independence and can buy your own stuff for personal enjoyment.

6. Decide whether your credit cards are shared or separate.

On one hand, keeping a single credit card gives you tight rein on your spending. On the other hand, two separate cards let you keep your credit scores separate, and one bad score won’t weigh down the other’s. That said, you must still be open about any debt problems you face and frequently sit down to monitor each other’s credit.

Now, these are just pointers. All marriages are unique and there are no hard and fast rules to successful money management. Decide over time what works and adjust for what doesn’t. The whole point in financial planning as a couple is to promote harmony and avoid rifts in your marriage.

The post 6 Tips on Handling Money in a Marriage appeared first on Country Weddings Philippines.


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