Money is one of the biggest reasons why couples, married or not, break up – which is why it’s high above the list of things to do in our 30 Days to Improve Your Finances series.
In the US, money is the leading cause of stress – so it’s really important to deal with this head on than to just wing it and see where the tide takes you.
Now…it’s a whole different story when you’re living with someone, more so if you have add kids into the mix. I don’t claim to be an expert in relationships and money but I have definitely learned a few things from more than half a decade of being with another person…and handling money in the process.
Here are my top tips for talking about finances with your partner:
1. You’re in this together
While a lot of people (regardless of financial standing) would recommend separating finances and having a prenuptial agreement, I still believe in combining finances both physically and mentally.
Of course, it may be a totally different story if you started out with a lot of money and your partner doesn’t. In our case, both of us started with none and our current financial standing was built (or destroyed) together.
Still, no matter what your financial arrangement is, it’s important that you think of yourself as a team. Whatever you go through as a family is a result of both your decisions (hopefully) and you have to wade through the challenges together. Besides, two heads is always better than one.
You might be interested: Investing for Beginners: Everything You Need to Know About Mutual Funds
2. Go through your issues calmly
And this applies to every issue that goes in your relationship, really.
Recently, I told the partner my feelings about a particular situation (not money-related) and he tried to dismiss it right away. Later that day, he told me he didn’t want to meet whatever I was feeling at that time head on, so he waited out until I was calmer (I didn’t shout or anything, of course) before he reassured me that I had nothing to worry about.
It took me a while to gather the courage to tell him about our credit card issue and thinking about it now, I realized I should have told him much sooner and we’d have been able to remedy it right away. I did have to wait until things were calmer so that he could process the major information I was about to tell him in a logical manner.
(Update: As of writing, we are one month away from finishing our payments for credit card #2 and will soon be tackling credit card #3 – both are already with the collecting agencies, unfortunately.)
3. Set priorities and learn to compromise
I’m pretty much a rebel and don’t always listen to what the partner tells me (lol) even when it comes to finances – and I don’t recommend you do that.
Time and time again, he would tell me to focus on one goal instead of aiming for a thousand impossible goals. I’m still at it but this year, when the collecting agency for one of our credit cards called and negotiated a repayment scheme, I went for it and focused myself on the goal.
To give you a little background: credit card #2 racked up a total of Php 75,000 balance but they offered it at Php 35,000 if I can pay it within the month. Thankfully, the agent spoke my language and it became easier to negotiate so we ended up paying for the same amount in a span of 4 months.
4. Use each other’s strength and weakness
I’d like to say that I’m awesome at making money, which is why the partner and I switched roles and I became the breadwinner of the family. And, now that I have somehow built my virtual assistant business into a higher (and steadier) income level, it made no sense to put him back to the work force.
Admittedly, I do control most of our finances as I am the one who pays all the bills that can be paid online – and I am also the one who makes sure that *most* of our investments/savings are funded.
Also read: The Family Financial Road Map
I do know that the partner is awesome at budgeting and stretching our money so what we usually do is get him to withdraw cash and he budgets it for our groceries and other household needs. Most of the times, I just tell him when our next batch of funds are coming and he takes care of the rest.
Other things we do together:
- Keep track of our cash flow. This habit actually started from a Mindanao trip back in 2016. Because we were on the road for 3 weeks, we had to keep close track of our money to make sure that we can afford paying for our food, accommodation, and transportation. The habit stuck with us and we’ve since moved from using spreadsheets to tracking them in YNAB.
- Build each other’s credit. Our mortgage is under my name and was taken back when we were still both employed. Since transitioning into freelancing, we’ve gone through a lot of hiccups. Currently, we are rebuilding our credit history by repaying our (1) credit cards which are all under my name (I use our because the bills racked up were used/enjoyed by the whole family), (2) putting bills in each other’s names: house, electric bill and business are under my name; Internet, phone and condo under partner’s name; a car purchase will most likely be under my name, and (3) building our funds: this includes our savings and investment accounts.
Our future financial plans:
We definitely have a lot of plans in mind that it excites and scares me both at the same time. Basically, here it is in a nutshell:
- Streamline our finances. We’ve already started by opening a checking account for my business which should flow towards his payroll account and maybe a savings account for me (all in the same bank). And then we’ll be building each other’s savings accounts from the other banks (these are already in place, just needs funding).
- Build our credit further. Freelancing makes things complicated for us because of the lack of documents. We’ve addressed this by building my business and having him as an employee. Still, we need to prepare our records and actual finances for when we purchase a car and start paying for the condo mortgage.
- Opening credit cards. Hate to admit it but it’s still a helpful tool for when we go full-force in our travels – and also in getting visa to certain countries. We’ll probably start with a secured one and possibly one for the business.
- Having separate leisure funds. Since we are still straightening our finances and building our cashflow, much of our money has been allocated to the more important things for the family. We do splurge in things like travel, books and a few lifestyle items but it’s awesome if we can tuck away a certain amount everytime that we can use to build separate savings and spend it separately the way we want it, without the guilt.
If you have other tips on making finance talk easier between you and your spouse (or partner), share them below. We’d love to hear from you!
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Our current goal in 2019 is to achieve Php 1 million in net worth before I turn 30 in October, or before the year ends.It’s a crazy goal and we are only a quarter through the journey.
If you want to build better financial habits, achieve financial freedom or even follow the F.I.R.E. (Financial Independence, Retire Early) movement, then follow us on Facebook or join our brand new Facebook group! Let’s encourage each other and slay our goals!
We’re also doing a 30 Days to Improve Your Finances series here on the blog, so make sure you keep your eyes peeled for daily posts in January!