When it comes to couples and love, money is a positive expression of intimacy at best and a deal breaker at worst.
If you ignore the topic of money, it’s like getting in a canoe without a paddle. You aren’t going to get very far and you might end up in a bad place.
Last month in Part One, I laid the groundwork to address emotions with your partner around money. In Part Two, my focus is “how to do your money as a couple”.
After working with many couples in my coaching practice, I’ve landed on
3 solid guidelines that will unravel problems before they take hold.
Here they are:
1. PRACTICE FULL FRONTAL MONEY DISCLOSURE
Honesty is the best policy when it comes to money. We usually see our partners bare naked with all their flaws. Money is no different. Does full disclosure make us vulnerable? Absolutely. But if you or your partner are keeping financial secrets, it can erode trust and eventually cause problems in your relationship.
An extreme example of secrecy, Justin and Karen became clients after Justin discovered Karen had racked up $18,000 in credit card debt. They had totally separate accounts with no crossover. Lack of disclosure almost destroyed their marriage.
Be transparent. Even if you have separate accounts, it’s not a bad idea to review all statements together periodically so there are no surprises.
2. SCHEDULE MONEY MEETINGS
You can’t be honest, or set goals, or plan spending if you don’t talk.
Schedule regular times to go over your finances. This should include planning and tracking your spending. Try once a week or once a month. Whatever works for you, but make it a priority.
Chances are, if you are like most people, it’s uncomfortable to deal with money issues. But do it anyway. It gets easier with practice. If you need motivation, reward yourselves. Eat ice cream. Go for a hike. Whatever works. We all would like money to handle itself, but realistically, most things that really matter aren’t easy to do. So, for the sake of love, do the work.
If you both feel confused about money management, read books and articles or get outside help.
Start with a simple book with good ideas by Jean Chatzky, Money Rules. Karen McCall’s book Financial Recovery is an excellent resource for looking at your relationship to money.
3. MERGE YOUR FINANCES: YOURS, MINE, OURS
I am often asked how best to handle finances as a couple.
Should you merge all money? Should you have joint credit cards? You are unique people, and you have to decide what is most effective for your life. Having said that, I do have an opinion! My experience coaching couples has led me to what I think is generally the most effective system.
Have a combination of joint and separate accounts. Use a joint account for shared expenses. An agreed amount is directed into the joint account, and each partner deposits a portion of income into their personal account. That way, each partner has some autonomy to do what they want, but you create a bond over the necessary expenses of life together.
As for credit cards, having a separate credit card with your partner as an authorized user is a good idea. If problems arise in the future, you will have the safety of your own credit.
Money is a complicated matter for couples, and many issues will surface. If you adhere to my basic guidelines, you will be equipped with strong paddles and can steer your canoe happily in the right direction.