Financial Blunders Couples Make

By BankBazaar | August 13, 2016

Financial Blunders Couples Make

It’s not uncommon to hear that yet another couple had a fight about finances and monthly expenses. We’re going to tell you about a few of the financial mistakes that couples make. Hold it. We’ll also tell you how you can avoid making the same blunders. Let’s take a look at how couples manage their money:

  • Merging finances

The wrong approach to finances among married couples is to say, “United we stand, but divided we bank”. What’s the right approach, then? Well, this might sound mushy but sharing is caring, right? When you and your spouse think finances, this must be your mantra for harmony: “This is mine, that is yours, it is ours”.

To ensure that you don’t create unnecessary doubt and suspicion in your spouse’s mind regarding finances, you should always be open with your spouse about money matters. This will create a strong bond of trust between the two of you. We can help you take the first step. Think about opening a joint account with your partner. Keep in mind that a joint account can be in addition and not a replacement to your individual account. While there could be some negatives to having a joint account such as finding out that the two of you are not financially in sync, the idea is to work through the issues and maximise the benefits.

  • Deal with debt

Many couples disagree on debts. Yes, we have different opinions. But consider this: if one of the two of you are struggling with debt, this would make it difficult to apply for joint credit. Say a Home Loan, maybe? A blame game’s not getting anyone anywhere.

What can you do? Here’s how you can tackle the situation. Before either of you decides to opt for something like a loan or a Credit Card, discuss the implications and plot out a strategy to manage and pay off the debt together.

  • The Saver vs Spender battle

Every couple has this: the Saver and the Spender. It won’t help if both of you get at each other’s throats about the other’s dismal spending habits.

Here’s how to deal with this thorny issue. Both of you need to sit down and acknowledge that you both spend money, maybe on different things. Lay out a budget and try to stick to it. Figure out how much to save and how much to spend on daily expenses.

  • Investing intelligently

Invest wisely with your future goals in mind. Don’t squabble about the risks of the investments. Keep an eye on your goals. Are you thinking about investing in a house or buying a car, going on a trip or having a child? Assess how much time you need to achieve each goal. Then start saving towards them. For example, if you are planning to buy a house in the next 2 years, a long-term investment such as an Equity Mutual Fund with a three-year lock-in period may not be the most ideal option. Rather, look at Short Term Debt Funds, maybe?

Additional Reading: Understanding Mutual Funds

  • Being secretive with money

This is a big mistake. It is always better to be open about your financial dealings. Every single one. Trust is a key element in a successful marriage and being secretive with something as important as your finances is not going to help. Plan your monthly finances together so that both of you know exactly what is coming in, how much is being spent for different things, and how much is going into savings.

  • Plan for emergencies

You never know when you will be faced with a financial crisis. Don’t take finances for granted. Rest easy tomorrow by saving up for emergencies today (and keep saving regularly).

Heard of an emergency fund?

Having an emergency fund in place will save you from stressing at a time when you need to keep your head on your shoulders. With an emergency fund, you simply won’t need to panic.

Avoid these mistakes and we can assure you that you won’t have finances spelling trouble in your marriage.

Additional Reading: Financial Mistakes You Will Regret At Age 50

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