7 Money Practices For Your Relationship
Relationships and finances go hand in hand whether we want them to or not. Since relationships and the monetary aspect of relationships tend to be more emotional in nature, how they are intertwined is important to dissect and understand.
“Data released by financial firm TD Ameritrade found that 41% of divorced Gen Xers and 29% of Boomers say they ended their marriage due to disagreements about money. What's more, if you’re arguing about money early on in your relationship, watch out: That may be the No. 1 predictor of whether or not you’ll end up divorced, according to a study of more than 4,500 couples published in the journal Family Relationships.”
This is why you need to make personal finances a priority as you are growing in your relationship. At the very least If you are not on the same page financially, you will never be on the same page with your partner in creating your desired life or achieving your goals. At the very most, money disagreements can cause irrefutable fractures in your relationship and could force you to go separate ways.
Here are 7 Money Practices For Your Relationship that will bring you and your significant other closer and allow you both to make your dreams a reality.
Envision your Future Together
Envisioning your future together is essential to knowing where you want your money to go.
Think of experiences and quality of life outside of just “things”. At the end of the day, you’re not going to reminisce about material objects, rather, you’re going to appreciate what you did and how you did it with the one you loved.
Identify your goals together, whatever they may be, and create a 1 year, 5 year and 10 year plan. Have fun and dream big!
Your money impacts your present and your future-- by envisioning your future together, you can be sure that your bottom line each month is working towards your aligned goals down the line as a couple.
Create a Financial Foundation
After you’ve had some fun dreaming together, now it’s time to create a financial foundation that will allow you to reach those dreams as a couple!
Establish an agreed upon budget and understand your financial boundaries. This requires communication and compromise -- the two cornerstones of any healthy relationship. It also requires you to set up a consistent routine. This can look like:
Review your budget wins and fails on the 26th of each month
What did you accomplish this month? Debt payoff? Savings?
Create a new budget together on the 26th of each month
What are you currently saving for?
Do you have any upcoming expenses?
What “fun money” are you giving each other this month
Reconcile the budget each week
Are you on track?
Have a half month budget review
Do you need to readjust your budget moving forward into the last half of the month?
Once you’ve established your budget, plan your bigger purchases together -- don’t allow any “surprise” purchases derail you. Being intentional with your money is the goal, as “winging it” tends to leave too much room for error and not reaching your goals.
Operate as a Financial Team
Money management should be a shared responsibility. The team mentality needs to be adopted as you are budgeting, saving money, paying off debt, investing, or with anything concerning personal finances in your relationship.
No one person should control these things, or the goals in your relationship.
As a team, you are accountable for each other’s financial actions. With that being said, show grace when mistakes happen, because they will. It’s about working together towards your goals and learning as you go.
Do Not Let Individual Income Define Financial Rights
Repeat after me: Income does not determine who has more of a say in financial decisions
Making more money doesn’t entitle you to spend more.
Making more money doesn’t entitle you to make all the financial decisions.
Making more money doesn’t entitle you to dismiss your partners’ wishes.
Income is not your worth in your relationship. Period. If there are feelings of resentment, competition, and entitlement, then something else is going on that needs to be addressed. Financial abuse in relationships is real and should never be tolerated
Maintain Full Visibility to all Financial Responsibilities
Transparency is just as important as communication and compromise in your financial relationship. It doesn’t matter what your “assigned role” is when it comes to your finances, you need to know what is happening with your money.
Know how to view every financial account the two of you have. Get familiar with the various responsibilities, so you understand all aspects of your finances and can empathize with your partner when times get tough. Take turns on your roles. “Walk in another person’s shoes” for a day/month/year. You will gain a great deal of respect for the other in the process.
It’s easy to say “that’s not my thing” and move on without any real knowledge or accountability. The truth is that it doesn’t have to be “your thing” for you to be aware of what’s going on in your everyday personal finances.
Understand and Respect Each Other’s Interests
You may be a couple, but you are individuals as well with unique hobbies, interests, and needs. I keep coming back to compromise, and this is why!
Allow for that in your finances. Plan and budget for money that supports those independent interests. An “allowance system,’ with no strings attached money for each person gives both parties choices without negatively impacting the larger financial plan.
Giving each person a set amount of money to do “whatever with” prevents judgement and criticism that often evolves into disagreements and stressful conversations
Celebrate Your Financial Accomplishments Together
This is the fun part of relationships and money! Recognize what you are achieving and celebrate the wins along the way.
Acknowledge the milestones in your financial journey together and Celebrate together.
Celebration and acknowledgement of progress keeps the momentum going and reinforces your alignment and connection to your goals.
Overall - being proud of each other and what you have done with your money to reach your goals strengthens the relationship and gives you the positive reinforcement to keep moving forward!