Money and Finances: Why Couples Need to Discuss These Key Topics in a Relationship

You have heard it a zillion times how finances are one of the most common reasons people fight and relationships fall apart. It is not necessarily about the amount of money in general so much as it is the stability of its presence. Is there a comfort zone present that allows us to be at ease knowing next month’s mortgage is taken care of? Is there money for the kids’ tuition this semester?

FINANCIAL ACCOUNTABILITY

The questions asked above are the ordinary, everyday questions and concerns people face, both individually and as a couple. When you face these issues alone, you know you are all you’ve got – so if the money isn’t there, then what did you do with the money you had? Can you justify the level in your bank account without guilt?

Regardless of the answers to the questions, the only person you answer to is yourself. However, when you are in a relationship with someone with whom you share expenses, then you are responsible to them as well.

DISCUSS FINANCES AND MONEY ISSUES BEFORE PROBLEMS ARISE

Many couples do not address financial issues or concerns until they are waist deep into them. That is not the time to do it! Prepare yourselves for a positive financial future together by discussing your financial goals, both independently and as a couple, prior to issues arising. Pay attention to your mate’s shopping and spending habits and realize their tendencies will affect you – and your pocketbook – eventually.

Don’t wear blinders to habits that grind your gears…these are the preliminary warnings that disputes and disagreements are heading your way if not addressed up front prior to any problems.

You may not want to bring something up in fear that it will actually cause a problem, such as the old adage, “if it isn’t broke, don’t fix it…” – but preventative conversation holds more potential of eliminating potential issues than waiting until there is one to bring it up. Once a problem exists, tempers are in form, attitudes are ripe and tolerance is extremely low for anyone to be pointing out someone else’s faults or placing blame.

MAKE FINANCIAL GOALS AND PLANS TOGETHER

It is interesting that so many couples do not discuss such foundational issues as money and how it should be used, prior to locking accounts together. Take time to have a few discussions in advance; make some basic goals and plans that will involve both of you sharing funds and thoughts about how to achieve the goals.

Involve each other in addressing the financial needs of the household, even if only one person is responsible for paying the bills. When both people openly participate, then both people are cognizant of their roles in the relationship and the financial responsibility to the household.

Step up the communication a notch, make it fun to learn how to save and spend together in agreement and have a healthier, happier relationship! After all, that is the basis for your sanity in an economically challenging environment…your peace of mind, peace in your relationships and peace within your home.

Managing Your Money in Today’s Economy – 5 Tips

How do you manage your money? Nowadays, it is important to make sure that the money you have is well-managed, especially since for some, expenditures have gone up while income seems to stay at a fixed rate. Below are some tips on how you can manage your hard-earned money.

1. Create a budget. Creating a budget is pretty much like creating a schedule. In a schedule, you allocate your own time. In a budget, you allocate your own money. You first have to include in your budget your most important expenditures. This will include bills, mortgage or rent, account payments and so on. You will also need to allocate money for your most important basic needs such as grocery. A budget will also allow you to estimate your average expenditure so that you are more easily able to audit yourself and eliminate any unnecessary additions or make adjustments accordingly.

2. Cut down on debts. One of the factors that could contribute to your financial decline is a huge amount of debt that does not budge. You could first make a list of all the debts that you have. Afterward, select the priority ones and work on a payment plan for them immediately. Keeping debt in sight can drain you of finances, plus, you don’t want to wait for the time when you are forced to pay off all your debts immediately.

3. Do a lifestyle check. This is a very important part of money management. Sometimes, a change in finances will also require a change in lifestyle. Take a look at your current lifestyle and see which activities or expenditures can be modified or eliminated altogether in order to free up your finances. Do you have too many gadgets at home that you need to maintain but which you don’t really use on a regular basis? Then maybe it’s time to sell some of them or to downgrade them. If you have subscriptions that you are no longer using (such as those for magazines), you may also consider canceling it.

4. Cut down on credit cards. This is also one way by which you can monitor your expenditures. When you use your credit cards to make purchases, the tendency is for you to just spend away, heedless of how much cash you actually have. When you spend with cash, it is much easier for you to determine which expenses can be accommodated by your current financial resources and those which cannot be accommodated.

5. Have a clear-cut financial plan. This will include the areas of savings and investments. It is just as important as budgeting for your present needs. Working on this area of your finances will ensure that you have a buffer in case you encounter some financial difficulties in the future or have to spend for something such as a minor treatment or additional education. It will also increase your chances of your having more in terms of cash flow and money resources.

How to Track My Finances

Whether your trying to tackle a mountain of debt or keep yourself in the black, tracking your finances is the first and foremost thing you need to do. After all, how can you go in the right direction if you don’t even know where you are. Financially that is.

Let me show you how I track my finances. I have tried many different ways, some good and some bad. This is the best way I have found to keep track of my finances.

First off, you need to make sure you can access you bank account and credit card information on line. If you are not set up for this and are unsure how to do this, go to your bank and ask them to explain how this works. You will have much more insight to where your money is going if you can log in any time of day or night to see what your balance is and what charges are listed.

The next step is to try and pay for absolutely everything with either your bank card or your credit card. If you choose the credit card route then make sure you are disciplined and pay your balance every month. There’s no point in tracking your finances just to see them go in the toilet because you started charging everything and end up paying huge interest.

Now sometimes it is not possible to pay for absolutely everything using a bank card or credit card. Most vendors will not let you put a 30 cent banana on your credit card. For these transactions, you will have to hold on to the receipt. Put it in a special place in your wallet or purse. Perhaps even carry a special envelope with you.

Now that everything you buy is either documented on line, or in your special receipt location, you need to put sort this information.

You can purchase some software like Quicken or Microsoft Money, or you can track it yourself with a spreadsheet you create yourself, or purchase one at a much reduced cost. Whatever method you use, you need to separate your different expenses and incomes into different categories. Add up the amount for each category every month. How else are you going to find out that restaurants cost you more than groceries, or that your new car guzzles gas twice as fast as your old one. Separate your categories into sub-categories as well, so that you can see that the reason why your car category was so high this month was because you had a repair (a sub-category), but your gasoline costs were about normal.

Once you do this for a month, you can start comparing month to month totals for each category and eventually, annual totals. This will help you create reasonable budgets based on real numbers and will keep you on track and in the right direction.

Now that I have shown you how I track my finances, you can do the same for yourself. Tweak the method if you have to (everyone is different), but the main thing is to start tracking and you’ll be well on your way to financial freedom and piece of mind.