We are all guilty of making mistakes, but some money habits need to be fixed sooner rather than later. These are actions and choices that not only put your finances in trouble, it can hurt your relationship.
Letting Your Spouse Handle ALL the Finances
I know that there is usually one person who seems more interested in the number crunching, budgeting, and investing portion of finances. We all have strengths and go ahead let someone do what they enjoy. However that does not mean that the other spouse is left in the complete dark or has no say.
This toxic money habit leaves the family weakened because one spouse doesn’t have vital information.
You may not like to budget, but you should have input with how you spend your money. You can not leave all the responsibility in one person’s hand, it’s not fair to either spouse.
Should something happen to the one managing the money, then where will that leave the other? Both of you are responsible and both of you have a say.
Financial Say is Based on Income
This is related to the first bad money habit, but it’s own special mess. Couples are unique and each family has their own financial situation. sometimes both spouses work outside the home, perhaps one or more are self-employed , or maybe one spouse works for income while the other manages the home and children.
Some couples grant financial say based on income earned. This harmful money habit can lead to resentment and that can erode your relationship.
Each couple has to decide what works best for them, but what should be an agreement in all these situations is that both spouses have a say. If one spouse earns less or is a stay at home parent, they still have input and it is not proportional to their income.
Not Having Regular Money Chat
You don’t have to a chat every week, but you should be on the same page and aware of what’s going on. For some couples, it’s once a month, just looking at the numbers.
It can be uncomfortable because at some point you will hit bumps on the road. No one likes taking about problems, but avoiding it will only lead to bigger ones.
Start off simple – do a money chat about your goals for this year and a few years down. Let it at that. Come back a few days later and look at your current situation. Talk about how you want to get to your dream based on where you two are today.
Thoughts on Breaking Bad Money Habits
I think as you can see above, the root of these bad money habits is based on lack of communication, trust, and respect. We all have to work to keep our marriages strong and our finances on target. I’d love to hear from you about what you think are bad money habits and what can be done to break them.
Couples show their love for one another in various ways -going on romantic dates or weekend getaways, buying flowers or preparing home-cooked meals together.
While these are the classic displays of affection, the truth is, realizing a common future together may be the ultimate sign of love—and establishing long-term financial goals is a key step in making that envisioned life a reality.
Unfortunately, many couples disagree about their financial future together. Or worse, they don’t speak about it at all.
Are You Both Planning for Retirement?
Need some proof? According to Fidelity’s fourth Couples Retirement Study, nearly four in 10 couples disagree about the lifestyle they want in retirement.
What’s more, 51% admit to arguing either frequently or occasionally about money—and 38% never resolve these arguments in a mutually satisfying way.
While it’s no surprise that couples argue, it’s a shame so many are strained because of financial issues that never received the benefit of a clear outcome.
The solution to this problem is fairly obvious. Set aside some time as a couple to talk about financial matters—and do so before problems have developed, not after.
By spending some time talking about and aligning future plans with your finances, couples stand to strengthen their fiscal and personal relationships.
At the very least, you’ll establish lines of communication that will make it easier to address financial problems that inevitably will arise.
Working Together for Your Retirement
To ensure a productive conversation, it’s important to bring a few ideas to the table. Here are some topics for couples to consider:
Milestone Events. Discuss “big” events early, like buying a house or starting a family. This takes pressure off making those important decisions down the line without giving it much thought.
Plan Together. Only 45% of Gen Y (born 1978-1888) women say they are a joint decision maker when it comes to retirement savings, and 36% of Gen Y-ers say their partner is primarily responsible for decisions regarding their retirement. This generation has time on their side, and can build a solid retirement savings account by starting early and saving as much as possible.
Financial Styles. Make sure to get to know each others’ planning and investing style. Are you on the same page about your risk tolerance and goals? Knowing what financial accounts and insurances policies you own as a couple is important for maximizing long-term growth potential.
Today and Tomorrow Funds. Buying school supplies for the kids, saving for college, and taking family vacations are all important, but make sure you’re setting enough aside for retirement through a 401(k), an IRA or other tax-advantaged savings vehicles. The earlier you get started, the bigger the long-term impact.
Work Resources. Make sure you’re both making the most of your employer’s retirement plan—at least up to any company match—and other benefits like health savings accounts.
Covering key topics like these will help make you more aligned with your partner.
It’s also a nice foundation to bring up broader discussions regarding your future life plans together, which shows a long-term commitment to the one you love.
If you’re looking for even more insights, find out your financial personality and compatibility with your partner by taking Fidelity’s Couples Quiz.
Are you are your partner financially compatible?And if you have any personal experiences to share, let’s hear them!
When was the last time you discussed finances with your partner and what was resolved? What did you talk about and what are some useful tips to avoid arguments?
Lauren Brouhard is the senior vice president of retirement at Fidelity.